Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
30 AUGUST 2016 QUOTE OF THE WEEK “…case for an increase in the Federal Funds rate has strengthened in recent months…“ – US Federal Reserve chairperson Janet Yellen ECONOMICS GRAPH OF THE WEEK RIAN LE ROUX | CHIEF ECONOMIST The rand took a knock following the drama surrounding the Hawks and Finance Minister Pravin Gordhan, with business, academic economists, American Chamber of Commerce, ex- and current political bigwigs, media and society at large reacting quickly and vehemently. Meanwhile, Jacob Zuma who is seemingly ‘taking control’ of the State Owned Enterprises, said the presidency cannot stop the Hawks’ investigation, and this is seen as cementing the likelihood of ratings downgrade/s in December. EQUITIES PETER LINLEY | BOUTIQUE HEAD: OLD MUTUAL EQUITIES US Federal Reserve chairperson Janet Yellen put a spanner in the works for global equities when she indicated a rate hike before year end is still likely - but does remain data dependent. US stocks were particularly hard hit, while the JSE All Share Index bucked the trend, remaining firmly in positive territory for the week, off a much weaker rand that was knocked by political developments. THIS WEEK LAST WEEK MSCI All World Index (US$) 418.4 420.1 -0.4 q MSCI Emerging Market Index (US$) 901.4 910.3 -0.9 q CBOE Volatility Index (VIX) 13.65 11.34 20.4 p SA Volatility Index 17.84 18.41 -3.1 q Net equity foreign investment -R2.9bn -R1.4bn -R1.5bn q 53506 52771 1.4 p FTSE/JSE All Share Index (ZAR) % CHANGE Source: INET INTEREST-BEARING ASSETS WIKUS FURSTENBERG | PORTFOLIO MANAGER: FUTUREGROWTH Mayhem…once again, with bond yields weakening sharply. We have been arguing for a while that the market, mostly due to the blind stampede into EM bonds, is not pricing risk accurately. Both the Gordhan affair and renewed fear about US Federal Reserve policy action have played their part. At the end of the day, it is about the growing risks facing the fiscus, heightened by the financial chaos at some of the bigger SOE’s. More worrying, we have yet to see significant concrete action by government to avoid a credit rating downgrade, which remains our base case for now. THIS WEEK LAST WEEK CHANGE US 10-year Government bond 1.6% 1.6% 0bps SA 10-year Government bond 8.9% 8.4% 50bps p R0.6bn R1.6bn -R1.0bn q 7.3% 6.9% 40bps p Net bond foreign investment SA 10-year bond yield US 10-year Treasury Source: INET CONTACT: Carmen Meyer [email protected] Old Mutual Investment Group (Pty) Limited (Reg No 1993/003023/07) is a licensed financial services provider, FSP 604, approved by the Registrar of Financial Services Providers (www.fsb.co.za) to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of 2002. (FAIS).The contents of this document and, to the extent applicable, the comments by presenters do not constitute advice as defined in FAIS. Although due care has been taken in compiling this document, Old Mutual Investment Group does not warrant the accuracy of the information contained herein and therefore does not accept any liability in respect of any loss you may suffer as a result of your reliance thereon. The information herein does not constitute an offer to sell or a solicitation of an offer to buy any securities.