Picture: Pixabay
JOHANNESBURG - Domestic financial markets recovered steadily for the second week in a row.

The positive news of the new Eskom board, the marginal increase in the inflation rate and the expectations for the recovery of the economy that was expressed at the World Economic Forum in Davos, fuelled this recovery in financial markets.

Not only did the rand appreciate strongly, but also foreign buying of bonds pushed the All Bond index higher.

Favourable sentiment around the parliamentary commission of enquiry into the affairs of Eskom and the terms of reference given to the commission of inquiry into state capture, also added to the current positive feelings around South Africa.

On the JSE, the all share index gained 1.2percent last week and is now 3.5percent higher since the end of December, and 16.3percent higher than a year ago.

Owing to the stronger rand, financial share prices also continue their strong rally and the financials index ended last Friday a massive 4.2percent higher for the week.

Despite the stronger rand, which is negative for rand hedge shares, mostly listed on the industrial board, industrial stock gained 0.8percent.

The stronger currency, however, had a negative effect on resources, despite a strong increase in the prices of gold and platinum.

The resources index decreased 1.5percent over the week, but is still 5.6percent higher for the year to date.

Property shares for the first time this year managed to recover and the listed property index ended the week 2.8percent higher.

On the capital market, the demand for bonds remained high and the ALBI recovered strongly last week as the index gained 1.4percent.

The rand continued to firm. The currency had appreciated during the week by 28c (2.3percent) to R11.89 to the dollar on Friday evening. This was 49c stronger than at the beginning of the year.

This week investors will await the release of domestic trade data. Eyes will also be on the release of the US job figures and the economic growth rate for the EU during the last quarter of 2017.