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Morning Market Scoop 20 February 2019


Morning Market Scoop 20 February 2019

In our morning market scoop:

  • South African Budget Speech later today at 14:00 SAST.

 Tito Mboweni


What’s the scoop? SA Budget Speech 2019

The Parliamentary buildings just off plain street in Cape Town sets the scene for a symbolic Greek tragedy? Or is it just that time of year again for yet another Budget Speech?

  • The National Budget Speech 2019 will commence later today at 14:00 SAST and should come to an end around 16:00 SAST.

The big picture – The newly appointed Finance Minister, Tito Mboweni will have his work cut out for him later today. Hopes that he might find a way to guide South Africa out of economic disaster is yet to be seen as troubled and failing State-Owned Enterprises (SEO) remain in the spotlight. Mboweni certainly has a formidable task ahead of him as Moody’s will also keep a close eye on proceedings later today. Eskom, SAA and other SOEs debt burden on the fiscal policy have been a focal point of the credit rating agency and positive developments around these institutions are needed.

  • The ratings agency Moody’s is expected to release their investment review for SA on the 29th of March 2019. Moody’s is currently the last ratings agency to have our local currency denominated debt at investment grade.

Notable companies reporting earnings are:

South Africa: Discovery Ltd (DSY), Glencore (GLN), Super Group Ltd (SPG), Transpaco (TPC) and Intu Properties (ITU)

What does all this mean for me?

  • The South African Budget Speech is closely watched as it gives SA citizens insights as to how government is spending our taxes. The Rand (ZAR) will react to the budget and more weakness might be on the cards. The ratings agency Moody’s decision will be closely watched because if we do get downgraded to sub-investment grade it will spell disaster. South Africa would then be classified as junk status and removed from the World Government Bond Index.