The South Africa Market Today - 6 October 2021

Following the last weekly report, the South Africa President announced that the country has entered alert level 1 lockdown, after 130 days of the third wave. The announcement comes with a shorter and later curfew, an increase in gathering allowances and the relaxation around trading constraints for alcohol sales. The news provides a positive outlook on the recovery of the South African economy. The tourism industry welcomed the news with open hands ahead of the festive season despite the current, 15% vaccination rate. Before the Covid-19 pandemic, the tourism sector contributed more than R426 billion to the economy and contributed to creating 1.5 million jobs, according to Tourism SA. Furthermore, international travellers are anticipated, with the latest announcement coming from the United Kingdom, to remove South Africa from their ‘Red List’.



Figure 2: Sun International one-week chart

The City Lodge Hotels Group has had a meteoric rise so far for the week and we have also seen its peer, Sun International, have a similar move and is currently up 32.07% by the time of writing. The Rand had also strengthened slightly on Friday and managed to trade briefly below R15. Yesterday, the South African Reserve Bank also highlighted inflation risks in a biannual review of its monetary policy stance, with the SARB Governor saying the reserve bank stood ready to act if it saw them materializing.

Oil prices have also surged as on Monday, OPEC+ decided on Monday to their planned output increase by 400,000 barrels per day (bpd) each month until at least April 2022. Natural gas and coal prices are also on the upside.

International investors are now looking forward to the Non-Farm Payroll numbers, which will be printed this coming Friday. Vaccine mandates assisted with the increased vaccination rate in the United States and anticipation that this could lead to workers.