JOHANNESBURG - Domestic financial markets remain under pressure due to geopolitical influences.
The saga around the controversial book by Jacques Pauw, The President’s Keepers, fears of an expected further downgrading of the country’s sovereign debt, the appointment of the commission of enquiring against Sars and rumours that more money will be allocated to students fees and less to social grants, all contributed to negative market sentiment on the share, capital and rand markets.
On the foreign markets, stocks and bonds recorded losses on US President Donald Trump’s tax proposals. US equities recorded the biggest two-day retreat since August. Together with uncertainty on the Brexit situation and a drop in China’s manufacturing data, volatility returned to global financial markets.
Most developed market share indices recorded negative numbers last week for the first time since the beginning of last month.
The rand, due to negative sentiment, lost another 10cents against the dollar last week and traded at the close of the JSE on Friday at R14.35 to the greenback.
Since the beginning of November, the rand has depreciated against the dollar by 6.1percent, or 82c.
Against the pound, the currency had weakened 34c last week and traded at R18.94 on Friday evening. Against the euro, the rand lost 20c and and was at R16.74, or 1.2percent, down for the week.
Given the uncertainty and volatility on global markets and the domestic geopolitical factors, the JSE was also volatile last week.
The all index traded last Monday and Tuesday at times at levels above 60000 points. The index, however, lost steam and close the week on 59776.12 points, marginal higher by 0.2percent on the previous Friday’s close.
The weaker rand contributed to negative close over the week for industrial shares (mostly due to sales of retail shares) and financials.
The sharp increases in the rand values for commodities, however, helped the resources 10 index to gained 2.5percent.
Listed property also traded negatively by 1.2percent for the week and the R186 Government bond had increased by 1.6percent to 9.35percent.