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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
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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
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