One hell of a month...

2016-11-03 10:45

There was a lot of drama in the SA economic and political landscape in the last 4 weeks. This is the list of the most popular & shared items on SharenetVIEWS during this period, and makes for sobering thought.

The award for most topical quote of the month goes to : "SOE government bailouts a giant patronage vampire-squid sucking on the faces of the SA taxpayer” #1 This JSE Indicator Is Giving A Stern Warning Summary : A host of metrics that have multi-decade track records of forecasting JSE bear markets are all converging at their worst readings Most sobering quote : "At the very least you should be acknowledging the current environment as increasingly toxic and hostile. " #2Which Bank To Invest In For A Junk Status Economy Summary : If the country were to face a downgrade to junk status, where can investors hide in the banking sector (if at all)? Most sobering quote : "We have already witnessed events that markets expected could trigger a downgrade, and on those days, there was nowhere to hide from the pain as all four of the big banks fell sharply. " #3Foreigners continue to dump SA assets ahead of ratings decision

Summary : Foreigners are panic-selling our local equities and government bonds, "Getting the hell out of Dodge" before our looming Junk Status downgrade

Most sobering quote : "In the last 12 months, a shocking R126Bn has left our shores, even exceeding the rush for the exits seen in the 2008 Great Recession and Global Financial Crises - the largest crises in living memory"

#4 Foreigners dumped another R16bn in SA assets in October

Summary : An update to the outflows saga, showing another R16bn left our shores in October. The rolling annual outflows now exceeds a staggering R133Bn

Most sobering quote : "With our 5-year Credit Default Swap (CDS) spreads now on par with other lower-rated emerging markets such as Portugal, Brazil, Turkey and Russia, these outflows seem to be a manifestation of our credit downgrade being already baked into the cake."

#5 Mr. Market Gives Budget Speech Thumbs Down

Summary : It appears the initial market reaction to the MTBS speech was net negative. Rand fell, credit default swaps rose, foreigners dumped R1bn in SA assets

Most sobering quote : "Biggest risk to credit rating is 34 month ongoing recession and SOE government bailouts a giant patronage vampire-squid sucking on the faces of the SA taxpayer"

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