After reading a news article on Business Report, it is evident some analysts in South Africa need to do more research on violent events on markets before commenting.
Econometrix released a report saying that there was no effect on the markets with the murder of Terreblanche but going by history of all “violent” events around the world, most of the time it’s not seen immediately and can really have a reaction days or weeks later.
We have covered the effects of events on financial markets in the past on the Rand Report and we are still keeping a close eye on the markets and especially not brushing off the effects of the murdered political leader.
The article goes on to mention that mining companies have declined to comment due to the sensitivity of the siuation.
The markets are still digesting what is going on. The court case appeared in record breaking time, the murderers handed themselves into the police, not much work was needed on the side of the police and the AWB have chopped and changed their stance on revenge or not, along with the ANC’s lack of control over Malema, general perceptions and then we have FIFA.
The amount of factors involved in this are huge and traders and investors are looking over this.
Today the ANC came out and said that they have warned Malema to control himself and to stop singing the racial song “Kill the farmer” but in the past he was also supposed to be fired from the ANC and that didn’t happen. ANC’s credibility is questioned in the markets.
It has already affected FIFA related bookings and people have been pulling their trips from South Africa, this will trickle down to foreign exchange, tourism and other related industries. Already car rental firms are worried that they might’ve purchased too many vehicles for the event now, they have been the main persons behind SA’s car sales increase.
We think it was way too early for analysts to come to a conclusion that the event didn’t affect the markets and with the AWB meeting still to happen on the 1st of May along with the second court day in just over a weeks time, there will be more moments of tension displayed to the world media which are monitoring the country closely.
The past three days of trading on the rand has been close to international movements with the dollar, so as mentioned before, there hasn’t been any large effects that relate directly to the murder but we thinking, hang tight… the markets aren’t done with this.
AWB membership increases to over 3,000 new applicants
Since the murder, new membership applications have risen. We think this is being fueled by racial tensionas well as crime as it has pretty much been a covered up genocide of white farmers in South Africa including farm workers by those who do violent land grabs. To give you an example how violent land grabs can get, just look at the attacks in Nigeria which are happening (Western media have been saying it’s religious but that was a by-product, it started from farm invasions) and Zimbabwe. Land grabs in South Africa are rarely seen in the newspapers due to the sensitivity.
GBP/ZAR
Due to a number of firms seeking a view on GBP/ZAR over the past two days on the Rand Report, we have decided to post a chart on it.
DAILY
As seen above, a divergence has appeared and ZAR weakness could appear. At the moment it’s evident that the rand is going sideways one most of the ZAR pairs, a show of “wait and see”.
MONTHLY
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