Weak rand could spark rally
Only a currency slide and rates cuts are likely to boost the JSE’s all-share index in the short term, say analysts
Market watchers say that only rand weakness and to a lesser extent lower interest rates are likely to benefit the JSE all-share index in the short term. Stanlib retail investment director Paul Hansen said that a weakening in the rand "should boost the rand-hedge shares on the JSE, so the potential exists for a very good rally if a few things fall into place". Capital Economics expects a 25 basis points cut in interest rates by the Reserve Bank at year end and a similar cut in 2018. Analysts reckon that the expected gradual lowering of interest rates would make for rand weakness, providing a driver for JSE returns over time. The all-share index has been moving sideways for the past three years. Political risk, credit rating downgrades and subdued economic growth have hit the earnings of companies since 2013. The last time the all share enjoyed double-digit growth was in 2013, when it ended the year 17.85% higher. The all share hit a record high of 55,188 points in April 2015, but at ...
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