The Markets Daily

We are seeing the best of our people – healthcare workers working themselves to the bone to help people suffering from covid and other illnesses, as well as those part of the vaccination drive, and many other aid organisations, but we started the week seeing some of the worst too. 

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It doesn’t matter where in the world you were, it seems like it was quite the eventful weekend. Up north, the focus was on the finals of two large sporting tournaments...

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The JSE’s precipitous drop on Thursday – its worst in almost 9 months - exaggerated the losses experienced globally as a deterioration in the global growth outlook, spooked investors. This isn’t a revelation, simply a tipping of the scales as more severe covid variants emerge. 

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I chuckled at the final paragraph of Siobhan’s commentary yesterday. My first thought was that Stevie and the Android staff at Hotel Sky (the six-storey smart hotel in the heart of Sandton) are a class of employee and could therefore unionise. 

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In many of these morning updates, I have commented on the balance of sentiment affecting markets as being largely affected by two factors: optimism on the global economic recovery versus conintued concerns over the spread of the pandemic. 

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The expected relaxation of oil supply restrictions after the most recent round of Opec+ talks are not going ahead. The reason, that Saudi Arabia and the United Arab Emirates continue to disagree over the UAE’s base quota. 

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It was a rough weekend for South African’s tracking SA’s infection rate, as we hit 26,896 new infections in a 24hr window as reported on Saturday. 

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I’m reaching for positive anecdotes this morning but struggling to conjure anything remotely optimistic. Perhaps it’s a lack of caffeine or the chill in my toes but I am exceptionally grateful for good health. As always, I wish you the same as SA’s covid case incidence rate is now at 69 per 100, which is twice as high as previous peaks. 

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Welcome to the third quarter of 2021. For certain corporates, it’s the beginning of a new financial year. For most, it’s just another Thursday or day 461 of an adjusted level of lockdown.

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“Vaccine optimism edges out variant risks, buoying sentiment.” A leading headline on Bloomberg this morning. Why, then, if Asian markets are revelling in the same optimism, is the rand market lagging? You’d think that yesterday’s landmark judicial pronouncement on former president Jacob Zuma reaffirms SA’s institutional strength, proving that no one is above the law. That, together with a subsiding fiscal risk premium, should provide a constructive backdrop for all rand assets. And yet, flows are subdued.

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