Share

Absa on US tapering and SA rates

Johannesburg - Chris Gilmour, investment analyst with Absa Asset Management Private Clients, says while Ben Bernanke’s announcement to keep the Federal Reserves stimulus programme intact - for now - is good news in the short term, has less desirable connotations for the longer term.

"On the one hand it’s probably good news for the markets that we’re seeing a delay in the so called taper," says Gilmour, "but, on the other hand, it’s saying that conditions in the US economy are more fragile than we originally thought …  so there remains a disconnect, between the high levels of the market and the underlying fundamentals. And it’s getting bigger.”

“Unless the start of the taper that has now been postponed coincides with a profound improvement in the U.S. economy,” warns Gilmour, “it could result in lower equity markets.”



As far as the September MPC meeting is concerned most observers were of the view that there was going to be no change, and that has turned out to be the case.

“The consensus view as to when we’re likely to see a rise in interest rates tends to be middle, even end of next year,” says Gilmour - who, “given the parlous state of the economy”,  doesn’t rule out the possibility of a small – “say, a 25 basis point” – interest rate cut.




We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders