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Watch: April 2020 economic update

The US oil price was trading below zero for the first time in history. This was driven by a flood of unwanted oil.

  • President Cyril Ramaphosa has announced that from May 1 the country will move to a level 4 lockdown. He did stress that this should be phased in because we do not want to risk coronavirus cases rising. We also do not want to move too slow to ensure we do not destroy our economy even more.
  • Ramaphosa says the impact of the coronavirus requires an extraordinary budget of around R500 billion which is an estimated 10% of the country’s GDP. This stimulus package is targeted at assisting both small to medium business as well as individuals. We would like to applaud our government’s efforts to support and aid the vulnerable.
  • The JSE peaked at a near eight-week high on Wednesday, April 28 with market sentiment boosted by reports that South Africa along with the rest of the world will soon lift lockdown regulations. At day end the All Share gained 1.66%.
  • The April gains on the indexes are as follows:
    • JSE All Share Index 11.71%
    • S&P 500 12.07%
    • FTSE 100 4.04%
  • South African Reserve Bank has cut the repo rate by 2% which has made a significant impact to individuals freeing up the cost of debt and increasing disposable income which will assist in unlocking more value into the economy. Pity for people living on interest on their cash in the bank, it is a third less now.
  • The rand is a volatile currency and very often tends to overreact which is influenced by economic, political and social unrest. This was evident with the rand hitting its highest ever point against the dollar trading at R19.29/$ on April 5.
  • On April 27 President Cyril Ramaphosa welcomed over 200 Cuban healthcare workers at the Waterkloof Air Force. According to a draft report sent to Treasury, South Africa has spent over R400 million on the deployment to assist with the fight against Covid-19.
  • The US oil price was trading below zero for the first time in history. This was driven by a flood of unwanted oil. The price plummeted to negative $40 a barrel which meant that oil producers are paying buyers to take the oil barrels off their hands as storage facilities are full. As at April 30, the oil price was just under $18 a barrel.
  • US President Donald Trump is making a new push to expand Covid-19 testing, this was decided after facing criticism that the testing being carried out was not enough. This was linked to the US coronavirus outbreak exceeding 1 million cases and the number of deaths exceeding 60 000.
  • Nissan has advised it faces a 95 billion yen loss following a collapse in global vehicle sales caused by the coronavirus outbreak.
  • UK Prime Minister Boris Johnson headed back to work after being admitted to hospital on April 5 after testing positive for the coronavirus. But the good news is that his partner gave birth to a healthy baby boy. Congratulations Boris and partner!

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