London terror attacks and tensions around North Korea spell another week of international turbulence. Gupta scandals put South Africa in the international headlines for the wrong reasons. Read on for more:
Global News
- Following a terrorist attack in the London underground, police in the UK have made several arrests.
- JP Morgan weighs in on the debate about Bitcoin, dismissing its potential, yet the cryptocurrency has bounced back after a crackdown in China caused it to fall. For more insight, read this piece on Bloomberg.
- After the UN implemented further sanctions on North Korea, the pariah state fired another missile over Japan. Markets dropped slightly after the news but returned to normal relatively quickly.
- Hurricane Maria caused destruction in Dominica, and Puerto Rico. The Island of Puerto Rico is without power and has been declared a disaster zone.
- The S&P 500 Index has gained 269% since the lows of March 2009—making this the third strongest bull market on record. The strongest was from 1990 to 2000.
- Since the Brexit vote, a weaker pound has fuelled UK inflation. Inflation was expected to be 2.7% year-on-year but came in at 2.9% year-on-year.
- The Dow rose by 2.1% in the week, the Nikkei in Japan gained 3.3%, and the Dax in Germany was +1.7% stronger.
Local News
- Egypt has overtaken South Africa in Rand Merchant Bank’s Where to Invest in Africa report. South Africa had held the top spot since the initiation of the report seven years ago.
- #GuptaLeaks hits keep coming. KPMG, Bell Pottinger, and McKinsey are making headlines worldwide for their involvement with the controversial family. Most of KPMG South Africa’s senior management team has resigned.
- KPMG retracted the Rogue Unit Report that implicated Pravin Gordhan in illegal activity. SARS Commissioner, Tom Moyane, has come out swinging, saying that the report was not theirs to withdraw.
- Two of the biggest companies on the JSE are reaching near record highs, Richemont, the second largest share, is up 52% since its low in August last year. Naspers, the largest share, has gained 51% since December.
- At the South Africa Tax indaba, Finance Minister Malusi Gigaba cautioned that the Q2 2017 growth (which took South Africa out of a recession) was both insufficient and unsustainable. He added that tax revenue collection is therefore likely to be lower and could lead to a revenue shortfall.
- South Africa’s current account deficit widened (for the third consecutive quarter) in Q2 2017 to 2.4% of GDP from 2.0% in Q1. Markets were expecting 1.7%.
- The Bureau of Economic Research Business Confidence Index posted 35pts for Q3 2017, above the 29pts for Q2. Although one can take heart from the increase, it should be viewed in the context of subdued business activity, weak domestic demand and elevated political uncertainty.
- Under the Voluntary Disclosure Program, which closed last month, South Africans have declared almost R35bn in foreign assets.
