Financial News 27th November 2023

Market overview
The FTSE/JSE All Share closed last week at 75 712.38, increasing by 2.42%. The telecommunications and health care sectors increased by 7.98% and 4.19% respectively during the week. The industrial sector decreased by 0.88% during the same period.
Looking at the MSCI indices, developed markets increased by 1.03% during the previous week, while emerging markets increased by 0.47% over the same period.

SA Interest Rate Decision
The South African Reserve Bank decided unanimously to leave its key repo rate steady at 8.25% on November 23rd, 2023, in line with expectations. This decision aimed to firmly anchor inflation expectations around the target midpoint and enhance confidence in achieving the inflation goal. The bank mentioned that inflation risks remain elevated, while the risks for medium-term domestic growth appear balanced. 
October’s headline inflation surged to 5.9%, nearing the upper limit of the 3% to 6% target range and moving away from the preferred 4.5% midpoint where it prefers to anchor inflation expectations. Despite this, the inflation forecast was revised slightly down to 5.8% for this year (vs 5.9% in September) and 5% for 2024 (vs 5.1%). 
Looking ahead, the projection indicates stability at 4.5% for both 2025 and 2026. Regarding economic activity, the SARB lifted its GDP growth forecast to 0.8% for this year (up from 0.7%), to 1.2% for 2024 (vs 1%), and to 1.3% for 2025 (vs 1.1%).

US Fed Funds Interest Rate
The Federal Reserve kept the target range for the federal funds rate at its 22-year high of 5.25%-5.5% for a second consecutive time in November, reflecting policymakers’ dual focus on returning inflation to the 2% target while avoiding excessive monetary tightening. 
Policymakers emphasized that the extent of any additional policy tightening would consider the cumulative impact of previous interest rate hikes, the time lags associated with how monetary policy influences economic activity and inflation, and developments in both the economy and financial markets. 
It also stated the FOMC had not discussed any rate cuts yet, while the primary focus remains on whether the central bank will need to implement additional rate hikes.

Thanks to PPS Investments for the weekly market overview.

South African rand little changed at start of data-filled week
The South African rand was little changed in early trade on Monday, ahead of a week jam-packed with economic data releases. Read the full Market Screener article here>

Oil slides before Opec+ meeting over supply curbs
Oil prices slipped on Monday, with Brent falling towards $80 a barrel, as investors awaited the Opec+ meeting later this week for an agreement to curb supplies into 2024. Read the full Business Day article here>

Marketmind: Markets turn risk-averse after bumper month
Asia started Monday in hesitant fashion and has turned steadily grimmer, although there is no obvious catalyst for the risk-off mood. Most regional share markets are modestly lower, as are Wall Street and European futures. Read the full article here>

Gold scales six-month peak on sliding dollar and bets over Fed pause
Gold prices climbed a six-month peak on Monday, supported by a weaker US dollar and bets that the US Federal Reserve is done with its interest rate hike cycle, while the focus shifted to US inflation data due later this week. Read the full Business Day article here>

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