SIKI MGABADELI: Good evening and welcome to the SAfm Market Update with Moneyweb, the first one for 2015. My name is Siki Mgabadeli.
Markets were off to a jittery start this year. I’ll speak to David Shapiro about today’s market action.
Then we are going to look at which stocks you should pay close attention to this year. Chris Gilmour is with us today, along with David Shapiro.
Then we are talking petrol prices, which are expected to drop by as much as R1.27/litre on Wednesday. We’ll unpack that and of course the broader global oil price situation.
But first, here’s today’s business news with Tumisang Ndlovu.
TUMISANG NDLOVU: Thanks, Siki. Good evening.
Economists say the pending drop in the petrol price is expected to have a knock-on effect on the economy. The price of all grades of fuel will drop by over R1/litre from Wednesday. The Energy Department announced the January fuel price adjustment last month, attributing the latest developments to the falling international crude oil price. Economist Mike Schüssler says another decrease in the price of petrol can be expected next month.
MIKE SCHÜSSLER: I think there is going to be another petrol price decline in February. It will be a lot smaller than the January one; it will only be about 20/25c or so and that will then bring the total reduction close to R3.50. At the moment it’s around R3.15, the total reduction from the high point of May last year.
TUMISANG NDLOVU: The rand on the other hand continues to struggle in the new year, having reached a 2.5-week low at over R11.70/dollar earlier today. This is due to investor bets on quantitative easing in the eurozone as well as weak global growth prospects training sentiment toward emerging market assets. Towards the end of last year the local currency fell to a six-year low after the Reserve Bank announced further growth in the country’s latest current-account deficit.
And in the US analysts are forecasting the dollar’s winning streak to continue throughout 2015. The currency reached its highest level since 2006 on Friday. Analysts say the upturn is a continued rally that started last July and saw the dollar gain 12% against a basket of currencies.
Financial indicators this hour – the rand is trading at R11.70/dollar, R17.81/pound and R13.98/euro. Gold is trading at $1 201.12/oz, platinum at $1 214.50/oz and Brent crude oil at $53.75/barrel.
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