The news that South Africa’s inflation rate rose marginally from 5.3percent in April to 5.4percent in May also helped financial markets. A decrease in the repo rate by the monetary policy committee is still on the cards.
The Constitutional Court ruling on Thursday that the National Assembly Speaker has the power to decide if a secret ballot should be applied in the motion of no confidence vote in President Jacob Zuma, also steadied share, capital and property markets on Friday.
The press release of the public protector calling for a change of the constitution to alter the mandate of the SA Reserve Bank, however, is still hanging over the head of the country’s credit rating.
The rand traded steadily over the week and was quoted at R12.94 to the dollar at 5pm on Friday. This was only 0.4percent weaker than the R12.88 close of the previous Friday and 22c stronger than the beginning of June.
Given the much lower price for Brent oil at around R45.60 a barrel, it is expected that the prices for both petrol and diesel will decrease by about 60c a litre on July5. This would mean that the price for diesel would dip below R11 a litre in Gauteng and more than 7percent lower than a year ago (R11.70).
The lower fuel prices will help to lower the inflation rate even more in months to come.
On the JSE, the all share index gained 671 points, or 1.3percent, last week, but is still only 1.7percent higher since the beginning of the year.
Industrial shares were the pick of the week, closing Friday 2.3percent higher than the previous week. Financials shares battled to recover after the public protector’s announcement on ABSA and the SA Reserve Bank. The Financial index gained 0.2percent over the week.
The Resources 20 index ended the week slightly higher, gaining by 0.3percent.