Market Commentary | The week that was
Ramaphosa to sit in the dark with the rest of SA: President Cyril Ramaphosa has decided to skip the international World Economic Forum (WEF) in Davos, Switzerland, and rather focus his attention on the national power crisis. In a tweet on 15 January 2023, Vincent Magwenya, the spokesperson for the President, said: “Due to the ongoing energy crisis, President Cyril Ramaphosa has cancelled his working visit to the World Economic Forum in Davos. Currently, the President is convening a meeting with leaders of political parties represented in parliament, NECCOM and the Eskom board.”
No power leads to no water: The City of Cape Town has asked people to use water sparingly during higher stages of load shedding. High-lying areas across Cape Town are the worst affected by the higher stages of load shedding because water needs to be pumped to reach these properties. Siseko Mbandezi, the acting mayoral committee member for Water and Sanitation, says higher stages of load shedding also result in reservoirs not being filled timeously.
Value of Tencent shares has nearly doubled since October low: The latest positive increase in the value of Tencent and peers, including Alibaba Group Holding, whose local shares have risen 85%, shows broader investor and stakeholder optimism about China’s pro-growth policies and the reopening of the country after the pandemic.
Markets: The rand saw slight movement against the dollar, staying under R17.00/$. Markets have started the new year on a good foot, with most main indexes performing positive. Compared to a tough 2022, the first few weeks of 2023 have been favourable for markets. China’s reopening and the prospects of a slowdown in inflation and interest rate hikes have led to a positive sentiment in various markets – particularly developing markets that are surpassing their developed counterparts.
Looking at the week ahead: The World Economic Forum’s Annual Meeting in Davos, Switzerland will be held from 16 – 20 January. On Wednesday, 18 January, SA’s December 2022 inflation data, as well as the Bank of Japan’s interest rate decision will be released.