Key Update: The US Fed Loses ‘Patience’ as South Africa Rejoices (Part 3 of 3)
(Continued from Part 2)
More good news for South Africa
South Africa is trending. Yes! It did cruise into the ICC Cricket World Cup semi-finals by its nine wicket win against Sri Lanka in Sydney. However, that isn’t what made investors happy in the country. Statistics South Africa reported inflation and retail sales figures for the country on March 18.
Consumer prices in South Africa dropped sharply in February. This was reflected in the dip in the inflation rate. The South African rand finally found some respite from the upward trending US dollar (UUP). The rand gained about 2.31% against the US dollar on March 18. The exchange rate had been 12.35 rands against one US dollar. The exchange rate was boosted up to 12.07 rands against one US dollar.
The iShares MSCI South Africa (EZA) is invested in South African equity. It gained 4.19% on March 18. South African firms like Gold Fields Ltd. (GFI), AngloGold Ashanti Ltd. (AU), and Harmony Gold Mining Company Ltd. (HMY) gained 8.90%, 8.01%, 6.36%, respectively.
Inflation is down in South Africa
According to Statistics South Africa, the headline inflation rate for February stood at 3.9%. This was within the South African Reserve Bank’s target range of 3%–5%. Inflation figures came in line with expectations. They saw a drop of 50 basis points, or bps, from January’s 4.4%. Core inflation excludes volatile food and energy prices. The country’s core inflation stood at 5.8% for February.
In South Africa, retail sales grew by 1.7%. This was below median market expectations of a 2.5% growth over the previous year’s figures. Although the figures didn’t come within the expectations, they offered encouragement. In South Africa, economic growth is expected to slow in the first quarter.
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