Business Confidence will accelerate growth in South Africa
The RMB/BER Business confidence index for 2018 Q1, rose sharply to 45, the highest level since 2015. A level above 50 is considered positive, but it's a move in the right direction.
As mentioned last week, improvements in investor, business and consumer confidence is the tail wind behind improving economic growth.
There are a few obstacles that could come in the way of increasing growth like the land reform policy, funding “free” tertiary education and the Mining charter.
If the SA government play their cards right, we could be headed for a “Brazilian styled recovery”.
Brazil's stock market has more than doubled since the process to impeach their president Dilma Rousseff started in late 2015. Inflation has come under control and the Brazilian real is also significantly stronger.
The remainder of the year will be volatile, but investors that buy the dips and don't get frightened out of the market will be rewarded.
Since the start of February, South Africa has had a political facelift.
We have a new president.
We have a new cabinet, in fact the finance minister that presented the State of the Nation at the end of February is no more…
And a decision to amend the SA constitution has been made – in order to do expropriation without compensation.
Last week’s movers and shakers…
Two to Buy
Sibanye-Stillwater: Lonmin's takeover is making progress
The trading pattern on Sibanye has been providing good opportunities for short-term traders. The price has retraced again on the offer for Lonmin and buyers have been defending the R11 level. A bounce is due and could materialise irrespective of the outcome of their offer.
Buy SGL below R11.50 for a move to R13.50 in the short term
Shoprite: Benefiting from interest rate cuts
SHP has pulled back to support around the R250 and with better consumer sentiment and prospects for interest rate cuts we expect another run to new highs.
Buy SHP below R257.50 for a move back to above R280.
None to Sell
Long Term Ideas
Anglo: Buy below R285
Sasol: Buy dips below R400
Aspen: Accumulate below R260.
Sygnia: Add below R12.50.
PPC: Close at R7.08.
Santova: Buy below R3.00.
Merafe: Accumulate below R1.55. Special Dividend on the cards.
Jubilee: Bottoming out. Hold.
MTN: Buy Dips below R122.50
Glencore: Diversified Commodity exposure. Hold
Wescoal: Long term buy. Add below R1.80
Naspers: Buy dips below R3,300, Tencent results due tomorrow.
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