Interest rates on hold despite higher inflation expectations

The Monetary Policy Committee (MPC) of the South African Reserve Bank (Sarb) decided to keep the repo rate unchanged at 3.5%, following its two-day interest rate-setting meeting on 20 and 21 January 2021. The Sarb revised its economic growth estimates for 2020 and the forecast for 2021 higher. Economic growth for 2020 is now estimated at negative 7.1% (negative 8% at its previous meeting in November 2020). The new projection…

Weekly market Update & Podcasts – October

Returns (to 23rd October 2020)   SA Equity (ALSI) SA Bonds (ALBI) SA Property (SAPY) Global Markets (MSCI ACWI in ZAR) 1 week 0.5% 0.8% 5.2% -2.0% 1 month 2.1% 1.7% 6.0% 0.5% YTD -0.6% 3.3% -46.6% 21.1% Latest material ·         Accountability needs to start at the top for Ramaphosa’s plan to succeed https://ninetyone.com/en/south-africa/how-we-think/insights/accountability-needs-to-start-at-the-top-for-ramaphosas-plan-to-succeed ·         Ninety One Market Review – Quarter ending 30 September 2020 https://ninetyone.com/en/south-africa/how-we-think/insights/ninety-one-market-review-september-2020 ·         Outlook still bright…

The rand is now the world’s most undervalued currency – here’s where it should be

The Economist’s Big Mac index shows that – theoretically – the rand should be trading at R5.43/dollar. The currency is now undervalued by 67.4%, compared to Brazil (-32%), Argentina (-39%) and India (-56%). Of late, the rand has been a bit stronger after SA recorded its first current account surplus in 17 years. The Economist’s Big Mac Index has been updated, and shows that the rand is now a whopping 67%…