Market reaction to the minibudget was subdued as investors stood on the sidelines, waiting for more detail in February. Finance Minister Pravin Gordhan’s medium-term budget policy statement has come out broadly as expected, going by the reaction on SA’s markets. However, some economists said it would be difficult for SA to maintain its investment status without details of growth plans. Johann Els, an economist at Old Mutual, said: "The jury is out whether this [statement] will be enough to avert a ratings downgrade in December … whether they did enough will be a close call." He did say, though, that Gordhan "has again done an impressive job of setting the medium-term framework for government finances and setting out the key priorities for getting the economy back onto a higher growth trajectory". The rand lost 15c and bond yields were weaker at the conclusion of Gordhan’s statement. The currency traded at R13.7542 to the dollar as Gordhan started his speech, and was at R13.9063 at t...
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