Monitoring operational performance at Eskom and Transnet
South Africans are currently experiencing the longest stretch of uninterrupted electricity supply in two years. While the lack of loadshedding is encouraging, Eskom still faces challenges within its legacy coal fleet and higher demand over the coming winter months, which means that loadshedding may not be behind us entirely. Another major utility impacting the economy […]
Monitoring operational performance at Eskom and Transnet
South Africa is currently experiencing its longest stretch of continuous electricity provision in two years. While the lack of load shedding is encouraging, Eskom still faces challenges within its legacy coal fleet and higher demand over the winter months, which means that load shedding may not be behind us entirely. Either way, the performance of […]
Will an acceleration in growth lead to a pick-up in inflation?
As the fall in US inflation slows and economic growth starts to rebound, the question arises: can inflation continue to cool as growth rebounds? The March US Manufacturing Purchasing Managers Index (PMI) reading moved above 50, indicating expansion. With inflation not yet at the Fed’s target and the economy already reaccelerating, rate cuts could further […]
What are opinion polls telling us about the SA general election?
2024 is set to be the year of elections. Time Magazine reports that at least 64 countries, representing about half of the world’s population, will hold elections this year. This, of course, includes South Africa, and with less than three months until South Africa goes to the polls in the 2024 general election, we take […]
Thank goodness for rooftop solar
The chart below shows the growth of South Africa’s rooftop solar installed capacity since 2022 and compares it to installed capacity for solar and wind (independent power producers) IPPs over the past five years. The growth of rooftop solar has been very rapid, so much so that we estimate that it is currently responsible for […]
Forecasting equity returns without forecasting
The famous American baseball coach Yogi Berra is often quoted as saying “It is difficult to make predictions, especially about the future”. But any investment decision is inherently a prediction about the future. By buying one asset over another you are predicting that that asset will outperform the other. But predicting the future is hard, so can […]
An update on the USDZAR
The Rand has weakened by about 80 cents to the US dollar since the beginning of the year. With an upcoming election, the resurgence of load shedding, the recent budget speech, and uncertainty over the timing of Fed interest rate cuts, it is difficult to attribute moves in the currency to domestic or global factors. […]
Budget 2024 | Perspectives
By Fabian de Beer, Chief Risk Officer, Mergence Investment Managers The Finance Minister presented the 2024 Budget last week within the most challenging and difficult economic and socio-political environment, possibly since 1994. He had to strive for a delicate balance, tackling difficult fiscal choices after more than a decade of low growth. Given weak growth […]
How did the market react to the budget speech?
Yesterday’s budget speech was generally well received by economists and market commentators. The Finance Minister maintained a commitment to fiscal consolidation, and the use of gold and foreign exchange reserves to reduce debt was taken as a positive. But how did actual market prices react? Below, we chart the R2032 bond yield, the Rand dollar […]
Rate cuts come to those who wait…
In a wide-ranging interview with FAnews, the intermediary portal, Mergence CIO Brad Preston chatted to Gareth Stokes about the likelihood of interest rate cuts, a soft or hard landing for the markets, and how Mergence is positioned to best benefit from likely scenarios.
The French connection: The battle for Multichoice
Will Canal+ walk away? The Multichoice Canal+ decision is analysed in Financial Mail by Ann Crotty, with comment from Peter Takaendesa Head: Equities, Mergence Investment Managers.
What are the prospects for rate cuts in SA this year?
A question never far from the mind of any of us with monthly bond payments. The consensus seems to be for about 100 basis points of rate cuts this year. While I can’t argue that this is an unreasonable base case, I do think that the risk to rates remains on the upside; in other words, […]
