Now hard economic reality is kicking in
South Africa could for once live in a world of hope and glory and global support during the previous weekend, after the historical Rugby World Cup win and the news that the rating agency Moody’s believes that the country should not be downgraded to junk status.
Financial markets reacted with a momentum of positive sentiment during the beginning of last week.
Spurred on by the visible groundbreaking of the new Ford automobile component plant in Silverton, Tshwane, and the opening of President Ramaphosa’s investment summit, we saw the rand exchange rate recovering all the ground it lost after the devastating negative news of the government’s current debt situation the previous Wednesday. Equities on the JSE also had a rally since the previous Friday, up to last Wednesday, and the Alsi on the JSE had easily broken through the 57650 level, more than 5percent higher than the beginning of the previous month (October).
Even listed property gained strongly and bond rates came back to almost the same level as the day before the Medium Term Budget Policy Statement. The lowering of the bank rate by the US Federal Reserve the previous week as well as some positive developments for a possible settlement on the US/China trade war also contributed to a mini rally in global equity prices and all three the Wall Street indices in New York had recorded record high levels.
Source: iol.co.za
