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JOHANNESBURG - Many members of the public, financial analysts, economists and businesses had expected to be rocked by last week's turmoil in South African financial markets.

The uncertainty around the national Budget, the Eskom dilemma, US President Donald Trump's initial unwillingness to engage in trade talks with China and Brexit, had al created enough room for chaos in the markets.

The blood pressure of the South African economic patient, namely the exchange rate, was expected by many to have shot up towards terminal levels.

The rand had already started to depreciate the day after President Cyril Ramaphosa's State of the Nation address as the worst load shedding by Eskom was introduced.

Rumours of further downgrading by the three rating agencies, especially Moody’s, helped to push up the economy’s blood pressure and the rand reached R14.42 to the dollar, just at the start of Finance Minister Tito Mboweni’s speech last Wednesday. This was 106cents weaker than the R13.36 to the greenback on February 5.

Despite these negative sentiments share prices on the JSE, however, continued to rocket as both these two main threats turned to the positive. In reaction, the rand started to improve substantially as the currency dipped in again under R14 and traded on R13.96 on Friday evening.

The South African public and definitely global investors were surprised by the words of Mboweni: “Isn’t it about time the country asks the question: do we still need these enterprises? If we do, can we manage them better?”

Although doubt among economists still exists if the economy will grow by 1.5percent in 2019, if the SA Revenue Service will be able to increase tax revenue by 9.2percent and the debt to gross domestic product (GDP) remains at 60percent of GDP, the willingness of the government to reconfigure the state-owned enterprise’s, managing the public sector wage bill, stabilising and reducing debt, keep expenditure under control and draw more foreign investment turned the initial negative sentiment before Wednesday into one of cautious optimism.

The more optimistic sentiment after the Budget indeed had contributed that South African financial markets could reap the fruit of the current global share market rally as Trump scheduled a meeting with China’s lead negotiator on Friday. That was just in time before tariffs on some Chinese goods more than double on March 1.

The Dow Jones industrial average already had increased by almost 4percent since February 11.

On the JSE, shares were boosted by the budget and Trump's willingness to discuss trade relations with China. The all share index improved by 1365 points, or 2.5percent, alone last week and is now 5.2percent up since the beginning of the year.

The resources 10 index gained 2.2percent, financials moved up by 1.3percent, industrials were higher by 1.1percent and listed property shares gained 1percent.

This week, investors await the money supply and bank credit figures from the Reserve Bank. The PPI and balance of trade numbers for January also will be announced.

Most developed economies will publish their latest Purchases Managers Indices, inflation rates, employment figures and consumer and business confidence indices.

Given the weaker average rand and higher average oil price, the price of petrol is currently under-recovered by 64 cents a litre and diesel by 81c a litre.

Given the levy of 30c introduced on fuel by Mboweni in his Budget, the price for petrol is expected to increase by around 100c and that for diesel by 120c at the beginning of March.

Chris Harmse is the chief economist Rebalance Fund Managers.