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September 2020 economic update

The rand continued to recover in September and is still expected by most economists to recover even further before the end of the year.
  • Spring is here, and things are starting to heat up again. After a great month for markets in August, volatility has once again reared its head in September as we drift towards the end of 2020.
  • President Cyril Ramaphosa announced on September 20 that the country will be moving to Level 1, easing some of the restrictions imposed on citizens under lockdown.
  • The rand continued to recover in September and is still expected by most economists to recover even further before the end of the year, although volatility could increase over the coming days as US elections draw nearer.
  • Capitec has reported a 78% fall in headline earnings after it lost out on transaction fees and loan sales during the lockdown as customers borrowed and transacted less.
  • The pound rallied against the dollar and euro before falling back slightly after a Bank of England official dismissed talk of possible negative interest rates to boost the UK economy.
  • UK Prime Minister Boris Johnson announced tougher lockdown restrictions for the UK as new cases surged to the highest since the pandemic began:
    • Pubs, bars and restaurants to close at 10pm;
    • People should work from home where possible;
    • Fines for not wearing masks or following rules increased to £200 for a first offence.
  • Over the past few months, since the whole world basically went into lockdown, e-commerce experienced rapid growth and showed no signs of slowing even during September when almost all countries went back to some sort of normal.
  • Zoom smashed estimates, sending the stock skyrocketing in September and pushing CEO Eric Yuan’s fortune to $4.2bn. The market cap of Zoom is now worth more than Mexico’s market index.
  • On a lighter note, the world was up in arms when it came to light that US President Donald Trump paid $70 000 to style his hair for television and then claimed it as expenses.
  • One-month index movements:
    • JSE All Share Index: – 1.58%
    • S&P 500 (US): – 3.80%
    • FTSE (UK): – 1.54%
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Michael Haldane

Global & Local The Investment Experts

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