Rebound
The Nedcor Economic Unit reports that the rand was weaker against major currencies earlier in the week, but rebounded following the Reserve Bank’s decision to leave interest rates unchanged on Thursday.
The unit closed at R6,12 against the US dollar on Friday compared with R6,17 in the previous week. The local unit was up to R7,89 and R11,44 respectively against the euro and the British pound from R7,99 and R11,62 in the previous week.
Local bond yields spiked up on Thursday, but eased marginally on Friday. The yields on the R153 2010 and the R194 2008 closed at 7,71% and 7,54% respectively on Friday after rising to 7,71% and 7,57% on Thursday and compared with 7,70% and 7,47% in the previous week.
Money markets rates were mixed, with the 3-month Jibar remaining unchanged at 7,50%. The yields on the 3-, 9-, and 12-month NCDs rose to 7,60%, 7,65%, 7,70% respectively from 7,50%, 7,45% and 7,45%, while the yield on the 6-month NCD declined to 7,55% from 7,70%.
The FTSE-JSE all share index closed at a high of 13085,2 on Friday from 13002,2 in the previous week. Resources rose 0,4% to close at 11361,1 and industrials improved 0,4%, ending the week at 11731,6. Financials rose by 1,3% to 13520,6 and the gold index was 4,5% higher at 1629,5.
In his State of the Nation Address on Friday, President Thabo Mbeki gave praise to the country’s democratic and economic achievements over the past decade.
He also said that as part of an ongoing process, government was still committed to increase investment in the economy, lower the cost of doing business, improve economic inclusion and provide the skills required by the economy.
Since May 2004, government drafted development strategies and investment plans of around R180billion for transport logistics, electricity and water resources.
It is anticipated that Transnet and Eskom will spend billions of rands on capital expenditure projects over the next five years.
Liberalising the telecommunication industry to enhance competition and also to reduce telecommunication costs remains high on government’s agenda. Government’s capital investment programme will focus on housing, rural and urban
infrastructure, public transport and logistics as well as water and electricity. The President also expressed concern over the inadequate skills level in the country, with a new National Skills
Development Strategy approved for 2005-2010 and R21,9billion set aside for this purpose.
There also plans to improve public services and to speed up the implementation of a comprehensive plan to improve capacity on the National Statistics System, including Statistics South Africa. Government’s plan to combat
HIV/AIDS will also be implemented with greater vigour.
Regarding policing and security, it was mentioned that government remains committed to eradicate crime by improving capacity.
The President mentioned that South Africa enjoys the honour of being the permanent venue for the Pan-African Parliament and will continue to ensure the success of the African Union and its programme, the New Partnership for Africa’s Development (NEPAD).
