Signs of a steady recovery as JSE, rand move in positive direction

Chris Harmse

PRETORIA – More data is beginning to indicate that the economy, and therefore the prospects for financial markets, is improving. This sentiment was echoed by SA Reserve Bank governor Lesetja Kganyago when he delivered the central bank’s and the Prudential Authority’s annual reports to Parliament’s standing committee on finance last week.

Kganyago emphasised that although the bank still expected the economy to shrink by -8.2 percent this year, there were definite signs that some sectors were improving stronger than expected after the lockdown measures were eased.

With the exception of tourism, other sectors were recovering in almost a V-formation, and although still negative, they were moving into single-digit year-on-year negative growth territory.

The Absa Manufacturing Purchasing Managers’ Index rose to 58.3 index points in September from 57.3 points in July. This is quickest expansion in manufacturing activity on record and the fifth consecutive month of growth. Business activity and new sales were boosted by the further easing of the lockdown restrictions.