It is a condition of our time that the US dominates the international news. It seems that other countries only make the news in terms of their relationship with the US – Russia, China, Britain, the EU, Israel, Iran, North Korea, South Korea, Mexico, even South Africa.
Dynasty Thought Leading
“Looking for long-term returns in a volatile world”
You would have received this article as part of the quarterly report that was sent today, but in case you missed it, it is definitely worth a read.
Follow this link to the article.
Global News
- Trump’s antics and “deal making” are catching up with his administration. Threats of a trade war between China and the US may have helped drive China and Russian relations, especially in regard to soybeans.
- After Trump broke the Iranian nuclear deal the North Korean Summit is looking far less positive.
- Trump threatened European allies, saying that anyone who continues to uphold the Iranian deal will face sanctions from the US. EU Leaders presented a united front, laying out the foundation of retaliation if these trade threats are upheld.
- Oh, and he called immigrants animals.
- Emerging Markets (EM) have experienced a volatile week. After picking up on Wednesday, they dropped on Thursday due to rising US yields and the strengthening dollar. The Dow and Nasdaq both fell by 0.2%, while the S&P lost only 0.1%. The MSCI EM closed the week 0.4% lower.
Local News
- Cyril Ramaphosa has put his presidential foot down and has written to the National Council of Provinces informing it that he has invoked Section 100 (1) of the Constitution placing the North West Province under administration in an effort to restore service delivery. This has come after a month of protests against corruption and maladministration.
- In the first quarter of 2018, South Africa’s official unemployment rate was recorded at 26.7%. This is unchanged from the unemployment rate recorded in the fourth quarter of 2017.
- Ex-Finance Minister Trevor Manuel has stated that Zuma’s presidency was a total disaster. (We recommend this link as a worthwhile read, as it shows the complex challenges that still lie ahead for the country).
- It has been revealed that state-owned enterprise South African Airways (SAA) needs another R22bn bailout. In total, the state has funded SAA approximately R20bn, so far.
- Refreshingly, the Director General of the National Treasury Dondo Mogajane confirmed that no additional funds will stem from the government so one wonders who will lend SAA the required funds and what the terms will be considering the risk involved. Mogajane went on to then comment on South Africa’s budget deficit, where he reiterated that SA’s growth remains frail whilst revenue collection and corruption at SOEs are still major issues which they are addressing.
- Public Enterprise Minister, Pravin Gordhan outlined his agenda on how to recapture and restore state-owned companies in a speech to Parliament on 15 May 2018. Follow the link for a transcript of the speech.
- The JSE ALSI ended the week 1.3% lower after emerging markets hit some midweek volatility. The rand fell 1.4% against the US dollar at 12.61, reversing its Wednesday’s gains.
- Wage negotiations for the public sector remain deadlocked as labour and government failed to reach an agreement at Tuesday’s meeting. Government is offering 6% to 7% for 2018, and CPI + 0.5% to CPI + 1% for the following two years, while unions are asking for 6.5% to 7.5% for the current year. Government’s 6% to 7% offer equates to CPI + 2% and CPI + 1% according to National Treasury’s inflation projections of 5.3% in February, and slightly below its projected 7.3% wage increase in the medium-term expenditure framework (MTEF). Negotiations are becoming increasingly difficult as unions have different demands on other matters, such as equalisation of pay and wages of low-skilled workers.
