JSE's Labour Day rally and South African market insightsOn 702 Money Show this week Peter Brooke discussed the influence of ongoing stimulus measures in China, the ripple effect on mining sectors, and the South African market's unique challenges, including the impact of load-shedding on food manufacturing companies. Additionally, Peter touched on the South African rand's fluctuation and its connection to local economic factors, such as debt, profit, and global commodity prices. DATE: 6 SEPTEMBER 2023 | LISTEN TIME: 5 MIN

      The money show the markets nothing much to read from the US. Because they closed, of course. The New York Stock Exchange. To mark Labor Day in the US. But the JC was online trading today, ending the day in positive territory by more than half a percent, pushed up by industrials and mining shares.  Financials not doing so badly as well, up more than half a percent. The likes of Kumba leading gains today up more than three and a half percent. Pick and Pay, whilst amongst the winners up more than 3% with implants and Northern down three and 4% respectively. We're now joined by Peter Brooke, a portfolio manager at Old Mutual Investment Group. Your reading of the JSE today as we start the week, Peter? Yeah, I think it was a reasonably good day and that really followed through from China where there's been continued little stimulus over the last couple of weeks and I think that's gaining a little bit of momentum and that is why we've got a slightly stronger mining sector. If you think of something like cumber iron ore, which links into the iron ore price, which links into China property, it's sort of clear what's happening. But as you say with the US shut, some of that direction faded out in the afternoon as European markets turned down from their highs and then big earnings week. Also in the JSE, avi releasing results, RCL Foods releasing results. Of course these are consumer product makers and you would start to see the effect of the economy and also the pressure on these South African consumers come through. In those mean you've got obviously Bidbase has produced stunning results, a little bit helped by some of their acquisitions and by offshore, but broadly good growth as a proxy for the South African economy. But when you come down into RCL and Avi, they're both food manufacturing. So you've got input price pressures, you've got operating costs, a little bit more of an impact from load shedding. So if you look at Avi, they had a cost of about just under 60 million rand, but RCL estimated that the cost in rainbow for them was nearly R160,000,000 in terms of the impact of load shedding. So tough environment, I'll give you an example inj so you've got the fishing business, you've got higher diesel costs or you've got higher input costs on your chicken side. These are very hard to recover when you're pushing it out into a tougher consumer environment. Yeah, not a lot to deal with. We'll be actually speaking to Paul Krukshank later, the CEO of RCL Foods, on those results and I'm sure he'll share some of his sentiments on the current operating environment. Looking at the rand touching that 19 rand point again, is this after the US jobs numbers, maybe people thinking the Federal Reserve is likely to keep rates elevated. I'm not sure about that. I think the South African rand. Well just if you look at today. As an example, the brazilian rail was stronger and the rand was weaker. So it's not necessarily following the world pattern so much. It looks like it's a little bit south african idiosyncratic. And I think if you look at we are issuing a lot more debt at the moment. Our profits are down. You look at some of our big drivers in terms of the I mean, you mentioned earlier the platinum shares were down, but you look at the price of rhodium as well down. The price of palladium is down. At the same time the price of oil is up. So our terms of trade are deteriorating. Our tax revenues are dropping. Our debt is coming under pressure. So I think there's a little bit of south african specific issues coming through on the rand. All right. And then if we look at the tuesday number, that second quarter GDP number coming through from STATSA, I'm not particularly nervous, but it's definitely a number we'll all be looking for to see how much growth the country is actually recording. Yeah, so johann els is our economist, and he's actually pretty relaxed about the numbers coming up. So, yeah, I think he's saying it'll be an okay number. Well, as long as we're not going into recessionary territory, I think we'll be quite fine. Hopefully it is a positive number. Peter brooke, their portfolio manager at old mutual investment group, covering the markets today, saying the rand really affected by local factors that have pulled it down. That's at 19 one against the dollar at this hour.