The Resi 10 index has fallen over 7% since the beginning of November these lower levels offer investors the opportunity to enter equity markets off a much lower base. The Standard Bank 36 month and 60 month PII RESI 10 cappings are looking most attractive at the moment at 140% and 220% respectively. The longer term Standard Bank Capital Accumulator investment remains an attractive investment vehicle in which to gain equity exposure as well, with rate of 46%.
It’s a relatively thin day today for economic data releases and hence there might be a bit more interest on what’s left—which includes the UK data on mortgages. This is interesting data as the government’s schemes to lower deposits for would-be house buyers has spurred enquiries, as judged by the Royal Institute of Chartered Surveyors (RICS). Mortgage lending has risen as well with monthly levels now close to levels seen before the credit crunch. For today’s data, for October, the market sees a further rise in home loans, to 45k from 42.99k in September.
This week will be a short week given the US Thanksgiving holiday on Thursday which effectively turns it into a long weekend and therefore a 3 day week for most market participants. This means a lack of macro data and quite certainly a lack of interest from the speculative accounts. Local corporate activity could thus dominate the Rand’s direction this week. Locally we see the release of quite a bit of economic data. GDP on Tuesday, PPI on Thursday M3 money supply and SA budget and Trade balance data on Friday.
Overnight the Bank of Japan Governor Kuroda said that the Bank’s 2% inflation goal is very ambitious and that policymakers were willing to expand monetary accommodation still further should the development of the economy jeopardize the target. However, he seemed to rule out the idea of negative rates, arguing that their impact on the economy was unknown.
In the UK a survey by the Engineering Employers Federation (EEF) of some 326 firms shows that credit demands are rising with 40% saying they had no need to borrow right now—the lowest since the survey started in 2007. However, the survey also suggested that firms were experiencing a rise in the cost of funding, with a net 11% saying that funding costs have gone up in the last two months.
Strategic Wealth Solutions is the official distributor of Standard Bank Structured Products to Independent Financial Advisors.
*Article compliments of Standard Bank CIB