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South Africa’s Q1 business confidence rises 11 points to 45

Comments (0) Africa, Business

(Reuters) – South Africa’s business confidence rose in the first quarter by 11 points in a sign that the country’s economy is picking up pace, a survey showed on Wednesday.

The Rand Merchant Bank (RMB) business confidence index compiled by the Bureau for Economic Research rose to 45 points in the first quarter from 34 points in the fourth quarter but remained below the 50-mark separating the net positive and negative territories.

“First quarter confidence jump is driven more by the expectation that the recent (mainly) market-friendly political development will boost activity levels in future than an immediate improvement in the real economy,” chief economist at RMB Ettienne Le Roux said.

Business confidence was dented by policy uncertainty under the leadership of Jacob Zuma but economists say President Cyril Ramaphosa’s election as leader of the ruling African National Congress in December, and as president last month, has raised expectations that the country will make economic reforms.

South Africa’s economy grew more than expected at the end of last year as agriculture and trade recovered, data showed last Tuesday, boosting its chances of avoiding a potentially debilitating credit ratings downgrade.

Earlier in the month, The South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) fell to 98.9 in February from 99.7 in January as exports, imports and retail sales fell.

“It goes without saying that the current uncertainty around land reform needs to be resolved as quickly as possible. If allowed to linger, the latest rise in the RMB/BER BCI (Business Confidence Index) could easily fizzle out with little or even no enduring positive impact on business capital expenditure and the economy at large,” Le Roux added.


(Reporting by Rahul B and Justin George Varghese in Bengaluru; Editing by Matthew Mpoke Bigg)

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South Africa’s rand steady, stocks to open higher

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand held its ground early on Monday and was seen getting a boost from improved risk appetite as investors search for higher yields on expectations interest rates will stay low in leading economies.

At 0630 GMT, the rand traded at 14.5825 per dollar, not far off its New York close of 14.5750 on Friday.

“The much-stronger-than-expected (U.S.) payrolls figure has not hurt global risk appetite or the rand. The market has taken the figure as confirmation that the US economy is not slowing down but not so strong that the Fed will have to hike” Rand Merchant Bank analyst John Cairns said in a note.

“A rate cut from the Bank of England on Thursday would further encourage risk-taking.”

Several U.S. Federal Reserve officials are scheduled to speak this week, offering plenty of opportunities for the market to glean clues about policy.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up more than 1 percent.

In fixed income, the yield for the benchmark instrument due in 2026 dipped 2 basis points to 8.685 percent.


(Reporting by Olivia Kumwenda-Mtambo; Editing by Andrew Heavens)

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