South Africa markets

Stuck between the rock of currency depreciation and the hard place of a slowing economy, South Africa’s Reserve Bank kept interest rates on hold at 5 per cent on Thursday while revising down its predictions for 2013 GDP growth.

With governor Gill Marcus declaring herself “increasingly concerned about the deteriorating outlook for the South African economy,” the bank downgraded 2013 growth forecasts from 2.7 per cent to 2.4 per cent – a far from insubstantial cut for a country where about a quarter of the working population is unemployed. Read more

South African corporate bond issues are still on the up after a record 2012.

Recent figures from Absa Capital, a subsidiary of Barclay’s, show the rise continuing into 2013. If issuance so far is any indication of what’s to come in the rest of the year, an increase of more than 50 per cent looks possible. Read more

South Africa is already known for being a one of the best-regulated financial markets – ranked first in the world by the World Economic Forum, no less. Now the country’s desire to keep in line with international market standards has prompted the Johannesburg Stock Exchange to strengthen its exchange traded derivatives market with a new default fund to protect investors.

The fund, announced on March 14, is aimed at protecting investors in the event of a clearing member defaulting – a necessity for clearing houses following the 2008 financial crisis. The question is – in the event it is needed, who ultimately pays? Read more

With interest rates stuck at historic lows in South Africa, unit trusts have had something of a boom over the past 6 to 8 months as investors turn from cash to unit trusts and other collective investment schemes. According to the Association for Savings and Investment SA (Asisa), the local collective investment industry attracted a record net inflow of R120bn ($13.6bn) in 2012. Read more

Men point at exchange rates posted on a board at the Regional Bourse (stock exchange) for French West Africa (BVRM) where members of the West African Economic and Monetary Union (UEMOA) are represented, 2008 in Abidjan.Although South Africa boasts some of the more sophisticated financial systems in Africa, there is still some scepticism around foreign exchange trading.

So can events like the SA Forex Expo 2012, held in Cape Town, change investors’ minds? Although market experts see the potential, the expo’s organiser admit that it needs to work on wooing cautious local traders to participate. Read more