Load shedding could affect our rating

Wealth

Load shedding could affect our rating

Eskom’s R420bn debt burden represents 15% of the sovereign’s debt and could have a major influence on how Moody’s rate the SA economy in its next round of ratings.

The past week saw the return of load shedding as news broke of financial difficulties from the nation’s power supplier. Eskom’s R420bn debt burden represents 15% of the sovereign’s debt and could have a major influence on how Moody’s rate the SA economy in its next round of ratings. Moody’s is the only rating agency that holds SA’s sovereign rating above ‘junk’.

South Africa’s unemployment rate decreased to 27.1% at the end of the fourth quarter of 2018, Statistics SA announced on Tuesday morning. The unemployment rate at the end of the third quarter of 2018 was 27.5%, which means the rate fell by 0.4 percentage points.

The rand weakened by 3.42% to trade at R14.07 to the USD and R15.88 to the euro.

Despite the news about electricity supply constraints, the local market returned a healthy 2.60% for the week, in line with international markets. The resources sector returned a massive 6.28% supported by a weaker rand and strong international commodity prices. The industrial sector returned 3.29%, while the financial sector closed 0.65% lower.

US retail sales unexpectedly fell in December, proving wrong reports of robust holiday sales from retailers. Sales slumped 1.2%, substantially failing to meet analysts’ expectations of a 0.1% advance. Weekly jobless claims data were also disappointing, with the four-week moving average of claims rising to its highest level in over a year. It would seem that the trade war with China are starting to hit home for US President Donald Trump and with two weeks to go in the US-imposed 90-day window to negotiate a trade deal with China, media reports suggest that Trump is considering extending a moratorium on raising tariffs on Chinese imports for an additional 60 days. This is positive news for global markets.

A motion to back British Prime Minister Theresa May’s efforts to renegotiate the terms of the Brexit withdrawal agreement was defeated in parliament on Thursday, as was a motion calling for a three-month Brexit delay. With just six weeks to go until the United Kingdom is scheduled to withdraw from the European Union, how the exit will play out remains very much in doubt.

South Africans can expect a harsh reality check this week from Finance Minister Tito Mboweni when he delivers his maiden Budget in Parliament on Wednesday. Mboweni will have to address the Eskom issue and appease rating agencies, all in this most crucial election year. 

 

 

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 SECURITAS – Wealth Management















Market data provided by I-Net | News article provided by Securitas with 4D Wealth

Fanie Wasserman, B. Com (Hons)(UJ), PDFP (UOVS), CFP®fanie@securitas.co.za
Johan Steyn, RFP®, Cell. 082 680 9510, johan@securitas.co.za
Albert van der LindeB. Com (US), B. Com (Hons)(UP), Cell. 076 087 3084, albert@securitas.co.za
Hannes Bresler, CFP®, B. Com (Hons)(UJ), Pr. Tech Eng, Cell. 082 823 7973, hannes@securitas.co.za
Michelle Kleinhans, 082 850 3092, michelle.kleinhans@securitas.co.za