The JSE traded firmer ahead of the public holiday with the US Federal Reserve expected to raise interest rates by between 50 and 75 basis points when its federal open market committee (FOMC) meeting concludes this evening.
Earlier the European Central Bank (ECB) held an emergency meeting.
“The meeting was held to address higher borrowing costs for many European governments. The outcome of the meeting was that hikes in the EU would be more gradual than (initially) thought,” comments TreasuryONE.
The outcome of the meeting saw the ECB create a new tool to tackle the risk of Eurozone fragmentation.
On the currency front, the rand traded between R15.95/$ and R16.05/$ for most of the day as the local unit anticipates the Fed interest rate announcement. While the expectation is that it will be a sharp rate hike, “the key would be the tone that Fed Chair Powell takes with any possible forward guidance the Fed will take with their rate hikes,” says TreasuryONE.
“Any indication that the Fed will step up their hikes meaningfully could be bad for EM markets, especially the rand with thin liquidity conditions tomorrow with South Africa out of the market.”
The local bourse added 2.77% with the All Share Index snapping a run of six consecutive days of losses to close Wednesday at 67,502 points.
In company news, Growthpoint Properties (3.46%) said in an investor update for the nine months ending March, that it “continues prioritising the strength of our balance sheet and liquidity position and is proud to have obtained a BB+ Fitch Global Scale rating.”
The property firm said office vacancies rose from 19.9% in its 2021 financial year to 22.4%. SA’s largest listed property company said it planned to convert one of its biggest business parks into residential property to curb the increase in office vacancies.
Meanwhile, Orion Minerals, said it would apply for an extension to its trading halt of securities on both the Australian Stock Exchange and the JSE. The reason for the extension is that Orion anticipates making a material announcement in relation to a proposed capital raising.
