File Photo: IOL
JOHANNESBURG - Domestic and global geopolitical events of the last two weeks had a devastating effect on South African equity, exchange and bond markets.

On the JSE, the all share index lost around 2000 points since the last week of July, while the R186 bond rate that had traded near 8percent a fortnight ago had increased to levels around 8.4percent.

The rand depreciated against the dollar from R13.87 on Wednesday to close at R14.78 on Friday.

The effects of the ongoing legal battle involving Public Protector Busisiwe Mkhwebane and Minister of Public Enterprises Pravin Gordhan and President Cyril Ramaphosa on various issues, as well as the ongoing crime and gangster clashes in Cape Town and clashes between police and various factions in Johannesburg and Pretoria were further fuel on the burning negative sentiment over South Africa.

The announcement last week of the ever-growing strong increase in South Africa's unemployment rate to 29percent (the narrow definition that no one anyway believes) was bad news for the rand. This was followed up on Wednesday by the hawkish announcement by the Federal Reserve that the lower than expected cut of 25 basis points can almost be seen as a once off and that future cuts seem to be off the cards.

As if this was not enough the rather unexpected announcement by US President Donald Trump that a 10 percent import tariff would be imposed on $300billion (R4.4trillion) worth of imports from China - which are currently not subject to import tariffs - on September 1, proved too much for the rand and equities on the JSE.

The all share ended the week on 56273.92 points, or about 2.5 percent lower than the previous week.

The resources 10 also had a bad week and traded down by 4.8percent. Some gold shares, however, had a strong run on Friday with AngloGold Ashanti up 7.9percent, Harmony Gold gaining 6percent, Gold Fields increasing by 5.31percent and Sibanye Gold up 2.42percent.

The financial shares were down by 3.1percent and listed property dropped by 2.6percent.

At the close on Friday, the markets still awaited the release of the US job data for July and hopefully it will bring some sanity to the madness.

Dr Chris Harmse is the Economist and Chief Investment Officer at Rebalance Fund Managers.

BUSINESS REPORT