South Africa Continued Lower Interest Rates Reason
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This year, most of the world's emerging markets are worried about two things, one is hot money inflows, one is inflation. Many central banks in Asia and Latin America market, has repeatedly raised interest rates to combat inflationary pressures, but there are some market continues to cut interest rates. South Africa's November rate cut of 50 basis points repo rate currently at 5.5%, if we start from the December 2008 count, the South African round of rate cut as high as 600 basis points, a startling rate.
South Africa's economic data we observe is indeed not very good performance. Although the World Cup because of the outside world that an increase of 0.5% economic growth, but the first quarter and second quarter, following 4.1% and 3.2% of economic growth, the third-quarter economic growth was only 2.6%, most of economics than the market Estimated home are poor. Another look at the inflation figures of 3.2% in September this year, barely rose to 3.4% in October, are 3% -6% in the central bank's inflation forecast range, economists say, the end of 2012, inflation in South Africa are relatively stable.
Careful observation, we found two reasons, one is insufficient investment in mining, continuous cut, the other is the unemployment rate is still high. In this regard, the South African government funds must be relaxed environment to sustain economic recovery environment. In addition, rural areas may also promote the construction, and create some job opportunities, and achieve food self-sufficiency. Currently South Africa still needs to import a variety of agricultural products each year, but still more arable land in its territory, there is considerable room for development.
South Africa's Government's performance to be seen, but the vitality of enterprises is relatively prominent. The telecommunications industry, the current pace of development in Africa is the world's fastest growing telecommunications, and the whole of Africa has 500 million users, of which the most important operators in South Africa. In addition, the United States, Wal-Mart is also optimistic about the domestic market in Africa, around South Africa, in the end of November 2010 to 23.1 billion bid to buy South Africa's largest retailer Massmart51% of the shares, we believe that this is for a positive market development in Africa .
Perhaps the South African economy is not necessarily perfect, but continued to loose monetary policies coupled with investor can find the best stocks in Africa, the South African market by the end of November this year, up nearly 20% ranked in the top 10% of the Asian market, we believe that Emerging market funds in the global environment began to crunch time on the South African market in the business cycle is very close to the bottom, it is worth our attention. |
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By :
Jessie Stone
Submitted
2010-12-18 07:40:46 |
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