JSE & Other Markets Continue to Suffer
JSE Takes Instant 6% Knock As Week Starts
SA President Cyril Ramaphosa made a special address (as have so many other Presidents worldwide) to the nation on Sunday evening. He announced some travel restrictions as well as an extended school holiday.
The local approach, like so many other countries, at first, has been a soft touch with the hopes of delaying the inevitable till a later time. This, however, did not stop the markets from feeding off the international plunge. When the JSE opened on Monday morning it immediately suffered a 6% loss* which is said to have wiped out Billions of Rand in investors funds.
Last week the JSE lost 15% with Sasol playing the role of ‘poster child’ for disaster. Sasol was once one of the top 10 biggest listed companies on the JSE (with friends like Steinhoff etc). Many big credit providers have also taken knocks with companies like First Rand and Standard Bank down over 7%.
It has been described as the worst fall on the JSE since 1997 with the worst 3 days on the market in the last 40 years. The local market has now dropped by 20% since the year began.
Will SA See a Repo Rate Cut?
Many countries around the world have announced interest rate cuts in an effort to build confidence and encourage spending. The USA dropped its rate by a full percent to basically 0% now. The cut, however, did little to slow down the panic sell of in the States.
‘The cut, however, did little to slow down the panic sell of in the States’
In fact, they had to stop trading one day due to reaching the limits of the allowed market drops on the NY Stock Exchange. The Australian stock market also dropped nearly 10% last week.
It is likely that SA will follow suit and announce a rate cut on Thursday this week.
*on the all share index