Rand calm before budget storm
The medium-term budget, CPI data and company results make for a busy Wednesday for economists and JSE watchers
The rand was relatively calm at R14.24/$ on Wednesday morning ahead of the medium-term budget policy statement, which new finance minister Tito Mboweni is scheduled to start presenting in parliament at 2pm.
The rand was trading at R16.33/€ and R18.49/£ at 6.20am.
The finance minister has been engaging with South Africans via Twitter ahead of his speech.
Besides the budget, it is a busy day for economists with StatsSA releasing September’s consumer price index (CPI) figures at 10am.
Inflation, as measured by the annual change in CPI, is expected to have remained at about August’s 4.9%, according to a poll of economists done by Trading Economics.
Investec Bank economist Lara Hodes said inflation may have abated to about 4.6% thanks to energy minister Jeff Radebe capping fuel price increases at 5c/l in September.
The temporary brake on fuel price increases will be felt in October’s inflation figure when petrol increased by R1/l and diesel by R1.24/l.
StatsSA is also scheduled to release August’s tourism and migration figures at 12pm.
Wednesday is also a relatively busy day for JSE watchers.
Brian Joffe’s investment holding company Long4Life said on September 27 that it expected to report on Wednesday interim headline earnings per share (HEPS) of about 16c.
A change in financial year-end to February from March, along with its first acquisition contributing to its earnings from November 1 2017, means the results are not directly comparable with the first half of its previous financial year.
Logistics group Value said on October 12 that it expected to report on Wednesday its interim HEPS increased sixfold from the matching period’s 5.4c.
But its results in the first half of previous financial year were reduced by an empowerment transaction. Excluding this, HEPS about doubled, Value said.
Asian markets pointed to a recovery for the JSE from Tuesday’s 2% drop in the all share index.
Among Tuesday’s biggest casualties was Bell Equipment, which fell 9.43% to R12.
As a Caterpillar dealer, Bell tends to track the US construction and mining equipment maker whose shares fell 7.7% to $118.98 in New York after release disappointing quarterly results.
Hong Kong’s Hang Seng index was up 0.86%, with Naspers’s principal asset Tencent gaining 1.22% to HK$282.20, indicating a better day for the top 40’s largest constituent after Tuesday's 4.6% drop.