There is much confusion over the current state of Zimbabwe, South African journalists are being held at the border, and the information that is coming out of the country is questionable. In other news, Treasury Budget Chief, Michael Sachs, resigned this week after ten years of service.
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- The Japanese Nikkei is at its highest level since 1992! It is also performing well in US dollars reaching its highest record in 21 years.
- The MSCI Japan Index has returned 22.9% in dollar terms in 2017. The MSCI World Index has gained 18.9%, the MSCI Europe Index 21.7% and the MSCI USA Index 17.5% for 2017.
- The Emerging Market Index is still ahead of the pack gaining 33.8% in USD in 2017, this is on the back of the remarkable performance of the MSCI China Index up a massive 54.3%.
- Robert Mugabe is allegedly being confined to house arrest in a possible coup in Zimbabwe, although he made a public appearance at a university graduation today. The environment has been described as tense, but non-violent.
- There have been whispers that the ANC Elective Conference, taking place in December, might be cancelled, which would prolong policy uncertainty and extend investor and consumer lack of confidence. Treasurer-General of the ANC, Zweli Mkhize added a certain level of calm when he said the conference would definitely go ahead as planned.
- The Fees Commission Report disclosed that currently South Africa cannot afford to support free tertiary education, but there has been some concern regarding the further capturing of Treasury and President Zuma’s direct influence into budgetary matters.
- Treasury Budget Chief, Michael Sachs, resigned over this apparent involvement of President Zuma in Treasury’s budgetary process. It is concerning to see established members of the Treasury leaving especially when we consider the speed that SARS was hollowed out, going from a respected institution to a seemingly openly captured one.
- The IMF warned again that political uncertainty in South Africa is causing delays in public reform and contributing to the problematic economic environment.
- The drought in the Western Cape is adding to South Africa’s economic woes, dam water levels are extremely low, creating a difficult agricultural environment, which should have a knock-on effect on our GDP growth. Employment in the area has been hit hard, losing 91 000 jobs since the beginning of the year.
- Since the end of September, the rand has fallen by 3% against the US dollar. Year-to-date, the rand has lost 8.8% against the pound, 14% against the euro, but only 1.8% against the dollar.
- Lately, the Russian ruble, Turkish lira, SA rand, Brazilian real and Mexican peso have all been weakening since the end of September. This suggests outflows out of these markets have begun, which tends to cause liquidity conditions in these economies to tighten, hurting economic activity.