Week 2

Week 2


Property Industry:

  • We expect the SARB to keep rates unchanged at Thursday’s (25 March 2021) meeting
  • We see a gradual rate hiking cycle from next year; however, there is a risk that this could be slightly earlier with the first 25bps rate hike towards the end of the year
  • Home loan applications for March continues above expectations
  • Bond application values for March to date is 17.89% higher than March 2019
  • Property granted value has grown year on year by 7.47%
  • Lightstone National house price inflation was 3.5% at the end of January 2021
  • The FNB HPI annual house price appreciation for February rose to 4.2% y/y
  • Registered bonds for February grew by 24% year on year

Local & International markets:

  • The rand is weakened this week and traded in a range of R14.75/$ to R14.93/$ (as by Wednesday 24 March)
  • It is below its 50-day, 100-day and 200-day moving averages (R14.93/$, R15.02/$ and R15.92/$ respectively)
  • EM currencies were largely down; the PLN (-0.7%), MXN (-0.7%) and ZAR (-0.7%) were amongst the biggest losers
  • The Eurozone composite PMI overshot expectations in March coming in at 52.5 pts from 48.8 pts in February
  • The manufacturing PMI also increased to 62.4 pts in March from 57.9 pts in February
  • The services PMI, however, remained in contraction at 48.8 pts in March from 45.7 pts in February
  • The UK PMI manufacturing surprised on the upside coming in at 57.9 pts in March from 55.1 pts in January
  • Service providers outpaced manufacturers for the first time since the start of the pandemic
  • The services PMI increased to 56.8 pts in March from 49.5 pts in February
  • The composite index also overshot expectations, increasing to 56.6 pts in March from 49.5 pts in February
  • The improvement in both manufacturing and services comes as the UK prepares to ease lockdown restrictions
  • Locally, the February CPI overshot expectations coming in at 2.9% y/y from 3.2% y/y in January
  • CPI was up by 0.7% m/m in February after having increased by 0.3% m/m in January
  • We expect general price pressures to remain contained in the short- to medium-term
  • Inflation is likely to average 4.1% in 2021
  • The oil price is up by 3.3% this week and up by 21.1% in the year-to-date
  • The gold price is up by 0.2% this week and down by 8.8% in the year-to-date
  • Brent crude oil is currently at $62.78/bbl; ($60.79/bl*)
  • Gold prices are at $1731/oz ($1727/oz*)
  • SA CDS is at 229bps (229bps*), higher than Brazil 207bps (201bps*) and lower than Turkey 466bps (464bps*)
  • Yields: US 10yr at 1.64% (1.62%*), German bund at -0.343% (-0.341%*) and SA 10-year generic at 9.74% (9.70%*), SA’s R186 is at 7.43% (7.44%*)
  • The JSE ALSI is down by 0.6% earlier this week (-0.9%*)

Covid-19 Update:

  • Covid-19 global update: cases have surpassed 124.3 million, while the death toll has surpassed 2.73 million; recoveries are at 100.27 million
  • The WHO noted that the gap between rich countries sourcing vaccines independently and poor countries seeking them through the Covax facility is growing wider More than 458 million doses have been administered across 134 countries at a rate of 11.3 million doses a day
  • Africa’s Covid-19 cases are at 4.14 million; fatalities are at 110,405
  • Morocco has 491,834 reported cases, Nigeria 161,868, Ghana 89,682, Kenya 122,040
  • Close to 7 million doses of the vaccine have been administered in Africa
  • Ghana has administered 420,000 doses and covered 60% of the targeted population in the Greater Accra region
  • In Morocco, more than 5.6 million vaccinations have taken place in the past 7 weeks
  • In Angola, vaccines have reached more than 49,000 people
  • A few African countries have either halted or suspended the AstraZeneca vaccine
  • SA has the 16th highest caseload, at 1.538 million earlier this week
  • Covid-19 deaths rose to 52,196 earlier this week; 1.463 million people (or 95%) have recovered from the virus
  • Gauteng has the highest number of confirmed cases, at 411,601 (accounting for 26.8% of the total); 10,138 deaths have been reported
  • The Western Cape has 281,307 (accounting for 18.3% of the total) and 11,426 deaths, while KwaZulu-Natal has 333,021 (accounting for 21.7% of the total) and 10,128 deaths
  • The Eastern Cape has 194,894 cases (accounting for 12,7% of the total) and 11,341 deaths
  • 64 million tests have been conducted since 5 March; 13,932 tests were conducted earlier this week
  • 182,983 healthcare workers have been vaccinated to date

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