Financial News 22nd May 2023

Market Overview
The FTSE/JSE All Share closed last week at 78 175.82, decreasing by 0.20%. During the previous week, the technology sector was the biggest contributor increasing by 5.33%. The oil & gas and telecommunication sectors were the biggest detractors decreasing by 3.97% and 3.26% respectively.

Looking at the MSCI indices, developed markets increased by 0.1.25% during the previous week while emerging markets increased by 0.51% over the same period.

SA unemployment rate edges higher
South Africa’s unemployment rate increased to 32.9% in the first quarter of 2023, the first rise in over a year, from 32.7% in the prior period. Among sectors, job gains were mainly seen in finance and community and social services. Conversely, private households, trade, mining, construction, and manufacturing shed jobs, as some businesses struggle to remain in operation amid the power crisis.

The expanded definition of unemployment, which includes those discouraged from seeking work, was 42.4% in Q1, down from 42.6% in the fourth quarter. The youth unemployment rate, measuring jobseekers between 15 and 24 years old, rose to 62.1% in Q1, from 61% in the previous three-month period.

South African rand slips in early trade, focus on the SARB this week
The South African rand was slightly weaker in early trade on Monday, with an interest rate announcement by the country’s central bank the main focal point of the week. Read the full article here>

Oil slips as US debt jitters outweigh supply fears
The resumption of ceiling talks on Monday will remain a key driver for crude and risk sentiment this week, analyst says. Read the full Business Day article here>

Sarb hike: 50bps or 25bps?
The South African Reserve Bank (Sarb) will hike the repo rate for the last time in the current cycle on Thursday, then hit the brakes. Read the full Moneyweb article here>

The implications of an ailing rand
The rand has been hit by a plethora of negative shocks, which have driven it to its cheapest level since the onset of the COVID-19 pandemic. These include higher global risk-free interest rates, a fall in the terms of trade, grey-listing by the Financial Action Task Force (FATF), concerns around the US debt ceiling and electricity load-shedding. Read the full article by Sanlam here>

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