The Week Ahead

The Week Ahead

14 - 18 April

The Rand

The South African rand has been experiencing notable volatility, showing a temporary recovery since Wednesday after reaching its worst levels ever against the US dollar. Recent weakness has been significantly influenced by US President Donald Trump's announcement of 30% tariffs on key South African exports, as well as local political uncertainty. Renewed strength in the ZAR has followed news that the United States would pause the implementation of these newly announced tariffs on most countries, with China being the notable exception.

Despite this short-term recovery, the long-term trajectory for the rand unfortunately remains one of depreciation. The current appreciation likely represents a technical correction from oversold levels rather than a fundamental shift in the currency's prospects.

South Africa continues to face significant economic challenges, with domestic political uncertainty creating additional volatility in the markets. While we welcome the temporary relief provided by the tariff pause, we remain cautious about the rand's future performance until there's greater clarity on both international trade policies and South Africa's internal political stability.

Commodities

Gold prices are experiencing renewed gains due to a confluence of factors: reciprocal tariffs, a weakening U.S. dollar, and growing expectations for Federal Reserve rate cuts in 2025. These tariffs have heightened concerns about a potential global trade war and recession, creating an ideal environment for gold as a safe-haven asset. China is not budging raising tariffs further on the US as well while instructing state lenders to reduce dollar purchases. Institutional confidence is evident through the largest quarterly inflow to gold-backed ETFs in three years during Q1 2025. Gold's current performance aligns with its traditional role during economic uncertainty, as it typically gains value when economic instability rises, risk appetite decreases, currency values fluctuate, interest rates fall, and central banks diversify reserves.

The escalating US-China trade war has triggered unprecedented volatility in global oil markets, with Brent crude prices pressured with market fundamentals significantly weakening. President Trump's aggressive tariff policies and China's retaliatory measures, including reduced US crude oil purchases, have forced dramatic downward revisions in oil demand projections—global growth forecasts for 2025 have been slashed by 40%, while China's expected demand growth expectations have been lowered significantly. These tensions have broader economic repercussions, evidenced by downgraded global GDP growth forecasts below 2.5% for 2025, declining consumer confidence in major economies, and volatility across transport, manufacturing and petrochemical sectors. Market concerns now extend to potential long-term structural changes, including accelerated Chinese transition to renewables, as OPEC+ considers extending production cuts and US shale producers scale back drilling activities amid fears of a prolonged market downturn.

Companies

Life Healthcare Group Holdings Limited: in its 1H25 trading update, expects EPS from continuing operations to be between 49.8% to 56.0%, higher as compared with 51.40c recorded in the prior year. Also, it expects HEPS from continuing operations to be between 48.8% to 55.0%, higher as compared with 51.40c recorded in the prior year.

Tharisa Plc: in its 2Q25 production update, guided that total reef mined declined by 12.4% to 1,131.10kt. 6E PGM production increased by 8.7% to 32.50koz. Chrome production advanced by 1.8% to 381.00kt.

Sirius Real Estate Limited: in its FY24 trading update, guided a 12.8% YoY increase in rent roll, driven by a combination of strong organic growth and the ongoing successful asset acquisition programme, coupled with continued strong demand for space at its business parks.