Standard Bank | Wealth Matters

HOME

INVESTMENTS

BANK SMARTLY

ONLINE SECURITY

GENERATIONAL WEALTH

REGULATION

TRAVEL

OFFSHORE DIVERSIFICATION

INVESTMENT OVERVIEW

Investment review

The effects of the Fed’s dovish turn in late 2018/early 2019 are clearly represented in the performance of both the bond and equity markets this year, but in the world of investments, that’s already yesterday’s news. The more pertinent question is, how much more monetary easing is required, or indeed necessary, to keep markets in high spirits?

While we cannot ignore the very real negative impact to both the economy and to business confidence from ongoing trade-wars and the persistent lack of inflationary pressures, an overall assessment of the US economy confirms that it remains, at the very least, fairly resilient and has the potential to continue to grow at trend for a while yet.

Closer to home, Minister of Finance Tito Mboweni recently presented a Special Appropriation Bill, for Eskom which encapsulates additional support over the next two years for the struggling state-owned enterprise (SOE) in the form of a capital injection of R59 billion.

Rating agencies responded negatively to the announcement of the Appropriation Bill and the SOE’s results, with Fitch shifting South Africa’s credit outlook from stable to negative and Moody’s announcing that these developments represented a credit negative event. This has raised concerns that Moody’s is set to change South Africa’s outlook to negative, which could result in a sovereign downgrade to non-investment grade.

Government is walking a tightrope in this regard and needs to ensure that the expenditure ceiling is not breached by cutting back on future spend. In addition, structural reforms are urgently required to enable change and growth in the country, which will ultimately stave off the risk of a sovereign downgrade.

Bernard Drotschie
Chief Investment Officer: Melville Douglas Portfolio Management


	Wealth and Investment South Africa operates under the license of The Standard Bank of South Africa Limited. (‘’Standard Bank’’), an authorised Financial Services Provider (FSP number 11287) and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). The Standard Bank email disclaimer and confidentiality note: This email, its attachments and any rights attaching hereto are, unless the context clearly indicates otherwise, the property of the Standard Bank Group Limited and/or its subsidiaries (“the group”). It is confidential, private and intended for the addressee only. Wealth and Investment South Africa is a business area under the license of The Standard Bank of South Africa Limited (‘’Standard Bank’’), an authorised Financial Services Provider (FSP number 11287) and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). This document and any associated verbal presentation have been prepared solely for information purposes by Wealth and Investment and accordingly do not constitute an offer, a solicitation of an offer, invitation to acquire any security or to enter into any agreement, or any advice or recommendation or any tax advice to conclude any transaction (whether on the indicative terms or otherwise), and must not be deemed as such. Should you not be the addressee and receive this email by mistake, kindly notify the sender, and delete it immediately. Do not disclose or use the email in any manner whatsoever. Views and opinions expressed in this email are those of the sender unless clearly stated as those of the group. The group accepts no liability whatsoever for any loss or damages – whatsoever and howsoever incurred – or suffered resulting or arising from the use of this email or its attachments. The group does not warrant the integrity of this email nor that it is free of errors, viruses, interception or interference. The group will never send you any email or other communication asking you to update or provide confidential information about you or your account. If you have any doubts about the legitimacy of this email or other emails you receive claiming to be from Standard Bank please forward them to [email protected] For more information about Standard Bank Group Limited see www.standardbank.com Should you wish to unsubscribe, please click here Moving Forward is a trademark of The Standard Bank of South Africa Limited.