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SA markets weak ahead of budget statement

Reuters / 24 October 2017 17:46 / Nqobile Dludla,

Stocks close in on record high.

SA’s stocks, rand and bonds were weaker on Tuesday, as investors refrained from making any large moves ahead of Finance minister Malusi Gigaba’s budget speech on Wednesday.

At 1500 GMT, the rand traded at 13.75 versus the dollar, 0.46% softer from its New York close overnight.

Gigaba will deliver his first Medium-Term Budget Policy Statement in parliament on Wednesday.

A Reuters poll found poor tax receipts could push the 2017/18 budget deficit forecast to 3.9% of GDP from an estimate of 3.1% in February.

Soft prices hit gold and platinum stocks. Picture: Moneyweb

“The former minister of finance, Pravin Gordhan delivered a prudent and highly redistributive fiscal budget in difficult economic circumstances,” said Economists at NKC African Economics in a note.

“However, it remains to be seen if his successor Malusi Gigaba will stick to this path as there are concerns that his enthusiasm for increased black economic empowerment and nuclear energy could see a widening of the country’s budget deficit.”

Radical economic transformation, a vague African National Congress (ANC) plan to tackle racial inequality, has emerged as the key rallying point for the party ahead of a conference in December to replace President Jacob Zuma as head of the ANC.

On the equities market, the Johannesburg All Share Index fell 0.16% to 57 904 points, while the Top 40 Index closed 0.14% lower to 51 597 points.

Gold stocks and platinum producers weakened 0.96% and 0.66% respectively due to lower prices as investors nervously awaited news on the next head of the US central bank.

Kumba Iron Ore, a member of the Anglo American closed 2.84% lower to R266.57 after reporting a 2% decrease in Q3 output.

Government bonds were also weak, an the yield for the benchmark instrument due in 2026 up 0.5 basis points to 8.865%.


LINK - https://www.moneyweb.co.za/news/markets/sa-markets-weak-ahead-of-budget-statement/

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