A week of turmoil in South Africa, the Public Protector recommended that the government changes the South African Reserve Bank’s constitutional mandate. Markets tumbled and the rand lost +-1.6% against the dollar.
Global News
- In the US, the Fed increased interest rates from 1% to 1.25%.
- US inflation came in lower than expected at 1.9% year-on-year in May.
- The Nasdaq closed 0.9% down following a global sell-off of technology shares.
- UK inflation for May was 2.9% year-on-year – the highest level in four years.
- The Bank of Japan kept interest rates on hold at -0.1%
- Gold fell 1.03% over the week.
Local News
- Business confidence in South Africa has fallen to its lowest levels since the 2009 global financial crisis, per data from the Bureau of Economic Research (BER).
- The JSE All Share Index (ALSI) dropped 2.63% over the week. ALSI has lost more than 7% since the beginning of June. The JSE Industrial 25 and the JSE Resource 10 indices declined 3.16% and 4.7% respectively.
- The JSE banking index was down 0.33% for the week and 2.85% for the month-to-date.
- The Public Protector targeted the South African Reserve Bank’s constitutional mandate in a report about a 1990s bailout for Bankorp‚ which was later bought by Absa.
- Last week, Mineral Resource Minister, Mosebenzi Zwane, published a new empowerment charter for mining without support from the Chamber of Mines.
- Mining Shares were punished as a result – last week Anglo American fell by -8.2%, Anglogold, -11.3%, Kumba -8.5% and Assore -10.3%.
- South Africa is the only country out of 41 monitored by the OECD (the Organisation of Economic Cooperation and Development) to currently be in recession.
