Local stuff

Concerns that the Chinese authorities may try to reduce domestic demand to slow down its overheating economy rattled global and domestic financial markets, reports the Nedcor Economic Unit.

The rand weakened sharply against major currencies over the past week, moving above the R7 level to the US dollar on Thursday before recovering slightly to end the week at R6,95 from R6,80 in the previous week.

Against the euro and the pound, the local unit closed lower at R8,35 and R12,38 respectively from R8,05 and R12,02 a week ago.

The bond market also softened in line with the weaker rand, with the yields on the longer-dated R153 2010 and the R194 2008 rising to 9,86% and 9,84% respectively from 9,70% and 9,65% in the previous week.

The volatility in the currency markets and softer commodity prices weighed on the equities, with most major indices ending the week sharply lower. The FTSE/JSE all-share index lost 253,2points or 2,4% to 10385,8 on Friday.

The resources index fell by 336,2points or 3,2% to 10113,1 while the gold index ended the week 3,8% lower at 1848,5 from 1922,5 in the previous week.

The industrial index was down by 150,0points or 1,7% to close at 8895,9 on Friday from 9045,9, while financial stocks also closed in negative territory at 9683,2 from 9885,0 in the previous week, a loss of 2,0%.

All measures of consumer inflation slowed in March, while producer inflation surprised on the downside, declining by 1,2% y-o-y (down 0,2% m-o-m) in March.

A trade surplus of R2,08billion was recorded in March following a surplus of R2,5billion in February. Both exports and imports rose during the month, with exports up by 13,6% m-o-m and imports up by 17,3% m-o-m, hence the narrowing in the surplus.

For the first three months of this year, the cumulative surplus stands at R4,2billion and is lower than the R5,2billion surplus recorded during the same period in 2003.