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AfDB CUTS SA ECONOMIC GROWTH FORECAST
The African Development Bank has revised South Africa’s economic forecast to 0.8% for this year.
That’s a 50% drop from its previous forecast, and it's due to global challenges, including Donald Trump’s trade war.
The Abidjan-based lender suggests that South Africa must accelerate its structural reforms to offset these challenges.
The AfDB’s country economist, Akhona Peter, says he expects trade tensions to harm net exports.
Other risks to the outlook include funding cuts for development assistance and an economic slowdown in China.
SA’S INFLATION EXPECTATIONS DOWN
Useful, then, to note that South African inflation expectations have fallen to an almost four-year low.
That’s according to the Stellenbosch-based Bureau for Economic Research, which reports that expectations for inflation have slipped to 4.5% in the second quarter, down from 4.7% in Q1.
Inflation expectations are a key factor considered by central banks when they adjust interest rates.
We have one of those coming up when the Reserve Bank’s Monetary Policy Committee meets later this month.
Forward-rate agreements, which speculate on such matters, are pricing in a 75% chance of a quarter of a percentage point rate cut by the Reserve Bank.
SUN INTERNATIONAL DROPS PEERMONT BID
And Sun International has pulled out of its R7.3 billion bid to acquire smaller rival Peermont.
The Competition Commission had already rejected the deal and was due to be heard by the Competition Tribunal.
The Commission made it very clear that if Sun International proceeded, it would result in more than 90% of the country’s casinos being operated by just two companies.
Peermont owns Caesar’s Palace in Gauteng – Sun International owns Times Square and Carnival City, as well, of course, as the Boardwalk Casino in our own Gqeberha.
MARKETS - MORE RECORD HIGHS IN NEW YORK
On the markets, both the JSE All Share and Top 40 closed down 0,3% on Wednesday evening, with the FTSE in London down 0.1%.
In New York, the Dow ended flat, while the S&P 500 rose 0.5% and the Nasdaq increased 1%, hitting fresh record highs in the process.
Tokyo this morning is just beneath flat – Hong Kong is down 1%, and Sydney is down 0.3%.
The US dollar remains unchanged at $1.18 to the euro, the rand at R17.60 to the dollar, R20.76 to the euro, and R23.99 to the sterling.
Sterling, by the way, sharply down on pressure from the bond market, worried by the Starmer government’s growing financial crisis.
Gold - $3,347 – platinum - $1,405 – Bitcoin – just over $108,750, and Brent Crude oil – just over $68.50 per barrel.
