It has been a busy week as President Donald Trump delivered his State of the Union Address and President Cyril Ramaphosa delivered his State of the Nation Address. The impact of Ramaphosa’s SONA is unclear, as the rand pulled back along with other Emerging Market Economies.
- President Trump did not declare a national emergency in his State of the Union Address, in order to get funding for his wall, but did talk divisively about the “scourge” of illegal immigration.
- In his State of the Union Address, President Trump warned Democrats to drop new congressional investigations against him. The Democrats did not listen. The probe will investigate whether the President’s financial interests are driving his decisions and whether any foreign interests have leverage over Trump.
- US stocks retraced most of the gains from earlier in the week as investors worry that the Trump administration won’t be able to reach a trade deal with China before the March deadline.
- The prospect of a hard Brexit is becoming ever more likely. Theresa May’s negotiations with the EU this week delivered no progress on a Brexit deal.
- There have been some positive developments in Zimbabwe this week as President Mnangagwa initiated talks with opposition parties after widespread violent protests in the country.
- President Ramaphosa delivered his State of the Nation Address on Thursday. The President hit all the right notes, addressing Eskom, corruption, job creation, and partially healthcare and education.
- Here are some key takeaways: growth and employment initiatives will focus on expanding exports and tourism; in the short to medium term land redistribution will concentrate on land owned by the state given the lengthy process of land reform; the constitutional review of land reform remains underway.
- Eskom will be dismantled into three parts, generation, transmission, and distribution, under a holdings structure, Eskom Holdings. It needs a new business model reflecting the changing industry and new technologies, while operational and cost inefficiencies need to be addressed. An independent state-owned transmission grid with a system’s operator will be established.
- For more detail, we will have to wait for the budget speech on 20 February 2019, but the government will continue to support Eskom’s balance sheet.
- The Hawks arrested seven people this week in connection to the Bosasa tender corruption scandal.
- French oil and gas giant Total discovered an oil and gas reservoir off the coast of South Africa, which could contain one billion barrels of oil equivalent.
- A couple of months ago Ivor Sarakinsky gave a presentation to some of our clients, where he talked about Ramaphosa’s Presidency of Inquiries. Here is an article from the Daily Maverick that provides further insight regarding this.
Source: Dynasty, Stanlib, Prescient, Daily Maverick, Moneyweb, Reuters, RMB, Aljazeera, and Bloomberg Markets, etc