|
Related Topics |
We take a look at the Johannesburg Stock Exchange (JSE) trading statistics for the week ending 14 February 2020 (on valentines day) and compare the numbers to that of a year ago.
|
Our highlight over the last week
Earlier today we covered the latest inflation numbers (January 2020) for South Africa which came in at 4.5% in more detail. Below an extract from that article
While this is the 2nd consecutive month for which South Africa's inflation rate increased, those keeping an eye on inflation should remember that inflation for January 2020 was mainly driven by higher inflation rates in the Western Cape (well above the national average) and the strong increase in the inflation rate of non durable goods such as food and alcoholic beverages (which tends to increase sharply in January after it declines in December over the festive period)
The summary below shows the inflation rates per province in South Africa for January 2020
Other noteworthy inflation numbers for South Africa in January 2020
Finally after suggesting for a few months that the South African Reserve Bank (SARB) monetary policy committee (MPC) should cut interest rates in South Africa they obliged by cutting rates a mere 25 basis points. But it is at least a cut but hardly enough to get the economy of South Africa going get millions of South Africans out of their debt trap.
The South African Reserve Bank should not be worried about the increasing inflation at this point in time as its mostly driven by strong inflation in the Western Cape and strong inflation in non-durable goods such as food. So the underlying inflation is not being driven by increased consumer spending on nice to have such as clothes, furniture, electronics etc, as the inflation of semi-durable and durable goods are still very subdued.
Read the full article here
While this is the 2nd consecutive month for which South Africa's inflation rate increased, those keeping an eye on inflation should remember that inflation for January 2020 was mainly driven by higher inflation rates in the Western Cape (well above the national average) and the strong increase in the inflation rate of non durable goods such as food and alcoholic beverages (which tends to increase sharply in January after it declines in December over the festive period)
The summary below shows the inflation rates per province in South Africa for January 2020
- Western Cape: 5.1%
- Limpopo: 4.7%
- South Africa: 4.5%
- Northern Cape: 4.4%
- Gauteng: 4.4%
- Mpumalanga: 4.2%
- North West: 4.1%
- Free State: 4.0%
- KwaZulu-Natal: 4.0%
- Eastern Cape: 4.0%
Other noteworthy inflation numbers for South Africa in January 2020
- Pensioners inflation: 4.6%
- Inflation for services: 4.0%
- Inflation for all goods: 4.9%
- Inflation for durable goods: 2.3%
- Inflation for semi-durable goods: 1.8%
- Inflation for non durable goods: 6.1%
Finally after suggesting for a few months that the South African Reserve Bank (SARB) monetary policy committee (MPC) should cut interest rates in South Africa they obliged by cutting rates a mere 25 basis points. But it is at least a cut but hardly enough to get the economy of South Africa going get millions of South Africans out of their debt trap.
The South African Reserve Bank should not be worried about the increasing inflation at this point in time as its mostly driven by strong inflation in the Western Cape and strong inflation in non-durable goods such as food. So the underlying inflation is not being driven by increased consumer spending on nice to have such as clothes, furniture, electronics etc, as the inflation of semi-durable and durable goods are still very subdued.
Read the full article here
JSE Trading Statistics for the week ending 14 February 2020
Number of trades:
Number of trades (2020): 1 589 172
Number of trades (2019): 1 472 656
% change year on year: 7.91%
Volume traded:
Volume traded (2020): 1 843 494 000
Volume of traded (2019): 1 997 001 000
% change year on year: -7.69%
Value of trades:
Value of trades (2020): R94 787 759 000
Value of trades (2019): R91 140 248 000
% change year on year: 4.0%
Foreign purchase/selling:
Net sales/Purchases (2020): -R406 889 000
Net sales/Purchases (2019): R4 019 542 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2020): -R4.041 billion
Net sales/Purchases (2019): -R9.656 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R9.656 billion for the YTD while this year they have been net sellers to the tune of -R4.041 billion in the year to date (YTD). While the numbers for this is year is a lot better than the previous year the fact is that foreigners remain net sellers of SA listed stocks and they have been for most of 2019, 2018 and 2017.
There are still lingering fears regarding the Coronavirus and its impact on global economic growth, particularly the impact on China's growth and the impact it will have an South Africa's economic growth, since we supply loads of basic commodities too China, the world's second largest economy.
The data above still shows that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2020): R17.782 trillion
Market Cap (2019): R15.382 trillion
% change year on year: 15.61%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has increased significantly over the course of the last 12 months.
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2020 will be:
Number of trades (2020): 1 589 172
Number of trades (2019): 1 472 656
% change year on year: 7.91%
Volume traded:
Volume traded (2020): 1 843 494 000
Volume of traded (2019): 1 997 001 000
% change year on year: -7.69%
Value of trades:
Value of trades (2020): R94 787 759 000
Value of trades (2019): R91 140 248 000
% change year on year: 4.0%
Foreign purchase/selling:
Net sales/Purchases (2020): -R406 889 000
Net sales/Purchases (2019): R4 019 542 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2020): -R4.041 billion
Net sales/Purchases (2019): -R9.656 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R9.656 billion for the YTD while this year they have been net sellers to the tune of -R4.041 billion in the year to date (YTD). While the numbers for this is year is a lot better than the previous year the fact is that foreigners remain net sellers of SA listed stocks and they have been for most of 2019, 2018 and 2017.
There are still lingering fears regarding the Coronavirus and its impact on global economic growth, particularly the impact on China's growth and the impact it will have an South Africa's economic growth, since we supply loads of basic commodities too China, the world's second largest economy.
The data above still shows that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2020): R17.782 trillion
Market Cap (2019): R15.382 trillion
% change year on year: 15.61%
So as shown in the JSE total market capitalisation above, the value of the overall market capitalisation of the stocks listed on the JSE has increased significantly over the course of the last 12 months.
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2020 will be:
- Exchange Rate (seems to be see sawing a lot. See our exchange rate page)
- Coronavirus and the impact it will have on Chinese demand for resources from South African commodity firms
- The impact of the two 25 bp cut announced by the South African Reserve Bank (SARB) monetary policy committee towards the end of 2019 and early 2020 and the impact will have on the Rand as well as the South African economy on the medium to long term. Additional interest rate cuts are now being discussed considering the muted inflation numbers published by Statistics South Africa yesterday and discussed earlier in this article
- ESKOM's financial woes and continued loadshedding and weaker than expected tax collections is forcing government to borrow more money, which is negatively affecting the South African exchange rate, and potential credit rating cuts coming for South Africa's government which pushes up the cost of borrowing, and this at a time when government is borrowing more and more
- Expropriation of land without compensation (EWC) has gone quiet in recent months but we are sure the EFF will bring it up again soon to get some airtime
- Potential expansionary monetary policy coming considering the very weak economic growth numbers
- Sluggish economic growth. See our SA GDP page and high levels of unemployment
- Additional tax increases that will likely be announced in the budget speech of 2020 and how it will affect South African consumers spending patterns and potentially increase inflation levels as taxes were increased by rates higher than inflation. In particular lack of bracket creep relief and higher sin taxes, fuel levies and road accident fund levies will hurt consumers.