Markets shrug off leadership change

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Markets shrug off leadership change
September 23, 2008

By Ethel Hazelhurst

Johannesburg - News yesterday that ANC deputy president Kgalema Motlanthe would replace Thabo Mbeki as South Africa's president made little impact on local financial markets, according to analysts, who said events abroad continued to dominate sentiment as the US government took further measures to stabilise financial markets.

Andre Roux, the head of fixed-income investment at Investec Asset Management, said the market was giving "the new guys the benefit of the doubt", referring to Motlanthe and the new policy makers in the ANC.

Roux said a weaker dollar supported the rand, which opened just above R8 to the US unit. At 5pm it was bid at R7.9563.

"Foreigners have been short selling the rand, so are more likely to buy than to sell," Roux said. Short sellers have sold rands they don't have, to deliver at a future date. They hope to make a profit by buying at a cheaper price, but are liable to make losses when sentiment turns and the rand strengthens.

Ian Cruickshanks, the head of strategic research at Nedbank Capital, said Motlanthe had "always been looked on as a moderate". He added: "There is no sense in the market that finance minister Trevor Manuel won't remain in his post."

Manuel's management of fiscal policy converted a huge budget deficit in the mid-1990s to a small surplus last year. His team set the scene for strong economic growth of up to 5 percent over the past few years. Manuel's departure from office would be seen by investors as detrimental to the economy and would put downward pressure on the rand.
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/yawn

Sorry Skinner, another Epic fail :D
 
Manuel's departure from office would be seen by investors as detrimental to the economy and would put downward pressure on the rand

it's not over yet ;) but early to predict
 
We'll see.

Rand still hovering at $8.16 and €12.00 as I type. Sounds still pretty f-ed to me!
 
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yeah all share down 3.75% on the day, that's a bit of a hiding, could be news related or just general market jitters...
 
Skinner said:
Now at $8.17 and €12.03, going down... :D
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And once again a weakening rand excites you..?!! Please do us ALL a favour and stay where you are and STFU. Hypocrite.

zagame said:
Manuel's departure from office would be seen by investors as detrimental to the economy and would put downward pressure on the rand

it's not over yet but early to predict
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But didn't he say he is not leaving anymore..?
 
Fsck me those are some impressive numbers...

When did the Rand become the strongest currency on the market and the dollar stronger than the Euro?
 
Zenbaas said:
:p He doesn't think when he trolls....
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Huh? I was challenged by someone stating that the Rand will not decrease in value in the short term. So I challenged back by showing that it fell in value in the next 24h therafter. The fact that the original post/bait by the challenger was removed by the moderators, is none of my concern.
 
The rand did weaken yesterday with the news of Manuel resigning, up to 30c (SA) ahainst the dollar in about 3 hours.....

But business as usual now that he said he will be staying and that him resigning was merely protocol. :)
 
Devill said:
The rand did weaken yesterday with the news of Manuel resigning, up to 30c (SA) ahainst the dollar in about 3 hours.....

But business as usual now that he said he will be staying and that him resigning was merely protocol. :)
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Yes but the Rand did not recover to the level it was before Trevor said he "resigned"; not even to what it was before Mbeki was "recalled" on Saturday, for that matter.

My claim that the Rand will not recover was challenged; up to now I have not yet been proven wrong.
 
Skinner said:
Huh? I was challenged by someone stating that the Rand will not decrease in value in the short term. So I challenged back by showing that it fell in value in the next 24h therafter. The fact that the original post/bait by the challenger was removed by the moderators, is none of my concern.
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one thing this forum does not lack... idiots.
 
Yesterday was a public holiday in SA, so will have to see what happens today when the markets open again.

I recon we going to see something similar to 2001 where the Rand hit R13 to the USD pretty soon now.
 
MacNabs said:
Yesterday was a public holiday in SA, so will have to see what happens today when the markets open again.

I recon we going to see something similar to 2001 where the Rand hit R13 to the USD pretty soon now.
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Nope, don't think so. Way too much happening in the USA and UK right now to get it that weak again. Plus with Zim finally sorting out their issues (hopefully), Angola producing oil and Botswana doing well it should bring some sense of stability to the SADC region.

Look, change of government happens EVERYWHERE, as long as there's a well documented and communicated plan there really isn't any reason for the markets to react to what's happening in SA. I think once Kgalema Motlanthe is sworn in and he has filled the missing ministerial positions with new faces things should quieten down. We're only 6 months from the elections anyway...this will at least allow everyone to get used to the idea and see if their promises of a new spirit of governance will hold water.

At least it will also mean the ANC and the President speak one language...
 
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