New Years greetings

 

Welcome to 2018, we hope that you had a pleasant end to 2017 and that this year will be a fantastic one for you.

 

January newsletters are normally full of predictions. Rather than try in this first newsletter of the year to predict exactly what the markets will do or how the Rand will move, we are going to focus on some interesting topics to keep an eye on in 2018.

 

South Africa

 

On the local front, 2017 saw its fair share of political drama with the ANC presidential race finishing in December. The Rand reacted quite positively to the win of Mr Ramahposa, strengthening around 10% in December. We also saw questions arise regarding the elected officials surrounding Ramaphosa and how they would help or hinder his journey as the new ANC president.

 

There is the proposed land expropriation without compensation issue and free higher education that needs to be dealt with in a relatively short space of time. The fine line that Mr Ramaphosa in grappling with, is one between the rising populism of the ANC and the economy. It will always come down to promises made vs the results achieved.

 

Brexit and the EU

 

At the end of January, formal negotiations are due to begin on the transition period after Brexit. The EU’s position is that the transition has to take place under all existing rules and regulations (including budget payments, the jurisdiction of the European Court of Justice and the free movement of people), and that it should come to an end on 31 December 2020.

 

Prime Minister Theresa May is likely to give another big speech on Brexit around February, which may give us further clues about what the UK wants out of the process.

 

The USA

 

The sentiment is that 2018 is shaping up to be a good year for the US financially. The US GDP growth could rise to 2.5% in 2018. For the US this is an ideal range for GDP to be in for healthy sustainable growth. Data ranging from housing to manufacturing and consumer spending have suggested solid economic growth in the fourth quarter. The unemployment rate was unchanged at a 17 year low of 4.1%.

 

Approach to the year

 

2018 is shaping up to be a very interesting year. The challenge will be to look for the opportunities as they present themselves, whilst avoiding unnecessary risks along the way. We are looking forward to what 2018 holds and we are delighted to be partnering with you on the journey ahead.