- Global economic growth has slowed but, with more dovish central bank policies, this in our opinion will provide a more positive market outlook as we continue through the second half of the year.
- The US Federal Reserve cut interest rates 0.25% for the first time since the financial crisis and suggests that this is not the start of an aggressive easing cycle.
- Japan left interest rates unchanged, causing the yen to gain and the pound to drop to a two-year low.
- Fitch Ratings announced that it has decided to leave South Africa’s international and domestic credit rating unchanged, but has revised the outlook down from stable to negative.
- Overall, we do agree with the concerns raised by the rating agency, as South Africa’s economic growth remains low at only 0.6% in 2019.
- Fiscal parameters have continued to decline, including the large possibility of revenue shortfall, with ever-looming further funding needed to support failing state-owned enterprises (SOEs).
- On the morning of July 30 the rand/dollar reached the R 14.25 mark before the announcement of Eskom’s 2019 financials. Even with the troubled SOE posting a loss of R 20.7 billion this was a positive, as a R25 billion loss was expected.
- Among the best-performing shares for the month were Woolworths (12.5%), MTN (5.6%) and British American Tobacco (3.6%)
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