Sep 29, 2010
Weakening the rand could scare investors – JSEBack
© Reuse this
This comes on the back of South Africa's ruling party policy review in Durban, where the African National Congress president and South African President Jacob Zuma said that measures to control inflation and improve efficiencies, through a more competitive and stable rand exchange rate, would be considered as some of the party's economic reforms to speed up job creation.
The rand has gained almost 27% since the start of 2009, and hit a two-and-a-half year high of R6,96 to the dollar late on Tuesday.
Parsons said in an interview that political intervention in normal market forces would certainly have a negative impact on investor sentiment. "It is not a natural phenomenon to interfere with currency prices. South Africa has not been an economy that has demonstrated such interference and on the back of that, a free market approach has always formed part of the JSE's economic principles."
Meanwhile, gold hit a lifetime high on Wednesday, its tenth record in 12 sessions, as the dollar dropped against a basket of currencies, including the rand.
The yellow metal has consistently been trading above $1 300/oz since last week Friday, but the strong rand has not been doing much for gold bulls invested in gold shares, exchange traded funds and Krugerrands, all of which are valued in rand. In fact, it would appear that they are worse off now, than they were in February when the rand/gold price pushed through R10 000/oz.
Nevertheless, Parsons said that gold has generally been a stable market and had delivered some good returns.
Parsons said that investors could capitalise on both weaker and stronger gold prices and currencies by making use of the products available on the exchange.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Researcher and Deputy Editor Online
Other Economy News
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...