Financial News 1st August 2023

Market overview
The FTSE/JSE All Share closed last week at 78 506.88, increasing by 2.19%. The financials and industrial sectors increased by 3.44% and 4.07% respectively during the week. The resources sector decreased by 1.38% over the same period. 
Looking at the MSCI indices, developed markets increased by 0.96% during the previous week while emerging markets increased by 2.82% over the same period.

SA business facing headwinds
The composite leading business cycle indicator is a measure of early signals of turning points in business cycles. During May, it declined by 1.7% from a month earlier. It marked the fourth consecutive month of declines in the business indicators, as six out of the ten available component time series decreased. The largest negative contributor was the downturn in approved residential building. By contrast, the positive contributors were the widened interest rate spread and the accelerated six-months smoothed growth rate of the real M1 money supply.

SA producer prices declines
The PPI measures changes in the prices of goods bought and sold by manufacturers and is considered a key indicator of future consumer inflation. The annual producer price inflation in South Africa declined further to 4.8% in June 2023, from 7.3% in the previous month and below market forecasts. It is the lowest level since February 2021, mainly due to a fall in prices of coke, petroleum, chemical, rubber and plastic products and a slowdown in the costs of metals, machinery, equipment and computing equipment. On a monthly basis, producer prices fell 0.3% in June, after a 0.6% increase in the previous month.

Thanks to PPS Investments for the weekly Market Overview.

SA’s tax collection falls significantly
In June, SA’s tax revenue collection fell by 7.5% y/y to R194.1 billion, driven by a drop in corporate income tax amid lower mining profits from weaker commodity prices. To date, 10.9% of the amount budgeted for 2023/24 has been collected. Read the full Stanlib article here> 

Top 5 things to watch in markets in the week ahead
More big tech earnings and the US jobs report for July will be the main highlights in the week ahead. Investors will also be focusing on the Bank of England’s latest rate decision and economic data out of the Eurozone and China. Here’s what you need to know to start your week. Read the full article here>

South African rand slips on weak Chinese data
The South African rand slipped on Monday after a strong July performance, on the back of weak Chinese manufacturing data that analysts say has put pressure on emerging market currencies. Read the full MarketScreener article here>

Huge relief for cash-strapped South Africans
Financially-stretched South African consumers are likely to see some relief in the coming months, with food inflation expected to ease by the end of the year. Read the full Businesstech article here>

Oil inches down but on course for biggest monthly gains in more than a year
Expected extension of voluntary Saudi Arabian output cuts into September will tighten global supply. Read the full Business Day article here>

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