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We take the same and we begin again…The mixed trends continued this week on African markets with the majority of the indices under our coverage closing on negative territories.

 

In South Africa political uncertainty continues to rhythm the moves on the JSE as President Zuma reshuffled part of his cabinet Tuesday. Zuma fired Higher Education Minister Blade Nzimande, leader of the country’s Communist Party tuesday. Nzimande is a supporter of Deputy President Ramaphosa to take over from Zuma as head of the ANC after next election in December of this year. President Zuma has appointed minister of state security David Mahlobo as energy minister and changed six ministers, including home affairs, state security and communications. Rumors arose at the end of the week that Zuma was preparing to fire Ramaphosa too. In other news, South African CPI reached 5.1% in September from 4.8% in August. The increase was expected following a rise in fuel prices last month. However, the 5% number should be temporary owing to base effects and we thus can expect October CPI to come below the 5% level since weak economic growth, low consumer and business confidence make demand too low to push inflation higher. The JSE gained 0.12%.

According to Nigeria’s National Bureau of Statistics, annual inflation decelerated again in September, reaching 15.98%. The distinct food price inflation index reached 20.32% due to increases in the prices of potatoes, yams and other tubers, milk cheese and eggs, bread and cereals, coffee tea and cocoa, soft drinks, fish, meat and oil and fats. Nigeria’s economy is still recovering from the recession following sharp oil price decline. The World Bank expects Nigeria’s economy to grow by 1% in 2017. The NGSE lost 0.71%.

 

In Zimbabwe, the Parliamentary Budget Office has warned that the Government could default on its Treasury Bills payment obligations on maturity. Most local commercial banks are highly exposed as they hold most of the TBs stock. The Government has been heavily relying on domestic markets to finance budget deficit. This view seems to underestimate the unfettered ability of the Government to print money. The ZSE Ind. gained 2.43% and is again this week’s best performer.

 

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