ECONOMIC CLIMATE
Retailers may breathe easier in fourth quarter, say analysts
A lack of confidence in the market and the economy will keep spending slow
While there is no outright good news for retail, analysts say the last quarter of 2017 is unlikely to plunge the sector to new lows. "The interest rate cut and lower inflation numbers should see conditions improve for consumers on the balance," said Old Mutual investment professional Meryl Pick. "There may be a lag and the improvement could be muted to begin with. We may see a marginally better fourth quarter compared with last year." The South African Reserve Bank surprised markets with an interest rate cut of 25 basis points in July. In the same month, inflation fell to its lowest level since November 2015. Inflation, as recorded by the consumer price index, dipped to 5.1% in June, from 5.4% in May. Pick said despite this encouraging data, retailers had indicated that trading conditions would remain tough for the rest of 2017. Cratos Wealth portfolio manager Ron Klipin said there was good news for retail shares at their current prices. A year ago, Pick n Pay’s share price was trad...
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