Nedbank Weekly Economic Monitor

06 Feb.

Nedbank Weekly Economic Monitor: Review of 30 January to 3 February and preview of 06 to 10 February 2012.

• The rand was supported by increased risk appetite.
• Total vehicle sales rose by 7,0 % y-o-y in January, mainly due to stronger passenger vehicle sales, which recorded the highest sales figure for January in five years.
• The trade account recorded a surplus of R4,7billion in December following a R8billion deficit in November.
• Global equity markets were boosted by better-than-expected earnings reports and strong US jobs data.
• Manufacturing activity picked up steam across the globe with key countries’ PMIs rising in January.
• The US labour market showed signs of continued improvement in January, with non-farm payrolls rising faster than market expectations.
• In the Eurozone the unemployment rate remained high in December.

Domestic

A combination of increased risk appetite as well as better-than-expected US employment data supported the rand last week. The unit ended at R7,52, R9,89 and R11,89 against the US dollar, the euro and the British pound respectively on Friday, up from R7,74, R10,23 and R12,19 at the previous week’s close. In the capital market, the yields on the benchmark R157 2015 and R186 2025 eased further to 6,42% and 8,07% from 6,44% and 8,13%. Yields on the 3- and 10-year BESA actuaries increased to 6,18% and 7,78% respectively from 6,17% and 7,82%, while those on the 5-year BESA fell to 6,87% from 6,89%.

Money market rates remained generally steady, with the 3- and 6-month JIBAR unchanged at 5,30% and 5,79%, while the 12-month JIBAR declined slightly to 6,15% from 6,16% over the week. The 12-month JIBAR fell to 5,95% from 5,98%.

Local equities closed higher on Friday in line with global markets, which benefited from the release of better-than-expected economic indicators for some major economies. The FTSE-JSE all-share index gained 1,5% over the week, ending at 34 387,0 on Friday, with industrials, financials and basic materials up by 2,2%, 2,3% and 0,3% respectively to end at 36 185,4, 24 169,1 and 30 813,4.

Following the exclusion of MBSA sales figures in December 2011, NAAMSA has now provided these numbers, although at an aggregated level only. The total sales figure of 48 251 indicates that total vehicle sales rose by 7,0% y-o-y in January, with passenger vehicle sales up by 7,5% y-o-y to 35 428, the highest January figure in five years. Purchases by the car rental industry accounted for 17% of sales during the month. Total vehicle sales, excluding sales by Mercedes Benz South Africa (MBSA), rose by 4,9% mo- m and 9,9% y-o-y to 45 944, boosted by higher passenger vehicle sales. Exports, excluding MBSA, were down by 23,6% m-o-m but increased by 13,0% y-o-y.

The trade account recorded a surplus of R4,7 billion in December following a R8 billion deficit in November, as a result of a sharp decline in imports relative to exports. The contraction in both exports and imports in December could be attributed to seasonal factors – as firms tend to stock up well in advance for the Christmas retail surge and there are fewer working days to process transactions. …

See the full monitor at Weekly Economic Monitor