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Market Commentary | The week that was

Jo’burg property values are not justified by the market: The city’s general valuations for 2023, reflecting that property prices have increased by 12% to R1.59 trillion over the past five years, are is being questioned by real estate companies and agents. Considering the current state of the market and economy, they claim, such a steep increase is impossible. This comes amid speculation that the city is artificially inflating property values to cover revenue shortfalls.

Should Dlamini-Zuma lead SA’s potential state of disaster?: President Cyril Ramaphosa alluded to the possibility that load shedding could lead to the declaration of a State of Disaster. The ANC is divided in their views whether Dlamini-Zuma is the right person to lead another State of Disaster, considering her decisions during the Covid-19 pandemic, that made her highly unpopular across South Africa. The DA agreed, claiming that Dlamini-Zuma abused her authority during the previous State of Disaster in 2020, and that she would do so once more if given the opportunity.

SA still faces 60% chance of financial greylisting: Despite two crucial pieces of legislation being rushed through at the end of 2022, SA still faces a 60% chance of being greylisted before the end of February, according to Compli-Serve, a financial firm that provides advisory and compliance services. President Cyril Ramaphosa signed two acts into law on 30 December, in an effort to improve the nation's capacity to combat financial crime. On 24 February, the Paris-based Financial Action Task Force is scheduled to make a decision regarding SA's possible greylisting.

Markets: The US market was scared by Friday's Non-Farm Payrolls number after the jobs number printed was nearly three times higher than anticipated. On Monday the dollar index quoted at its highest level this year. The rand was weaker on Friday after Standard and Poor (S&P) Global’s South Africa Purchasing Managers Index (PMI) reflected a drop to 48.7 in January from 50.2 in December. Readings below 50 indicate a reduction in activity. This has been the fastest pace of contraction since the end of 2021. On Monday (6 February), the rand was trading at R17.47/$, R18.87/€, and R21.08/£. Brent crude was trading at $80.17 a barrel.

Looking at the week ahead: President Cyril Ramaphosa will deliver his State of the Nation Address (SONA) at Cape Town City Hall on Thursday, 9 February. More corporate earnings numbers will be released, with reports from The Walt Disney Company, PepsiCo, Activision Blizzard, PayPal, Uber Technologies, and automakers Toyota and Honda, among others. On Friday, preliminary February data of the University of Michigan’s Consumer Sentiment Index (MCSI), assessing consumer confidence in the US as well as 4th quarter Gross Domestic Product (GDP) figures from the UK will be released.

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