Market Commentary | The week that was
South African Budget Speech: Finance Minister Enoch Godongwana will be delivering the country’s Budget Speech tomorrow, 22nd of February. Godongwana's highly awaited address comes amid the country's tough economic times with high unemployment, struggling businesses, in both the government and private sector, and an inconsistent power supply. Since the beginning of this year, the country has seen power cuts every single day. This has led to a downward revision of the country’s economic growth forecast for 2023; down from 1.1% to 0.3%. All eyes will be on the Minister for solutions to Eskom’s problems as the state enterprise’s debt continues to skyrocket, while also needing extra funding to fix the entire operation.
Loadshedding Stage 6: The work week has started with an announcement on Sunday 19 February, that “Stage 6 loadshedding will be implemented continuously until further notice”. Another comment was: “The three running units are operating at minimum capacity and are at risk of shutdown, should the coal supply constraints not be resolved.”
New Minister of Electricity: Although the announcement has seen widespread criticism, President Cyril Ramaphosa is not deterred and will go ahead with the new appointment. “The minister will be responsible for driving the various actions being coordinated by the National Energy Crisis Committee to end loadshedding as a matter of urgency.
Another Earthquake Hits Turkey and Syria: Just two weeks after the earthquakes hit both Turkey and Syria, another one occurred on Monday 20th February. This quake was recorded to have a magnitude of 6.4 and was centered near the southern Turkish city of Antakya.
Looking at the week ahead: The expected highlight of the week is Minister Godongwana’s Budget Speech on Wednesday. Minutes from the January Federal Open Market Committee (FOMC) meeting will be released on Thursday.