Johannesburg – President Jacob Zuma’s latest controversial Cabinet reshuffle on Tuesday continued to cause ripples on the JSE on Wednesday morning.
But according to experts these current losses were however modest compared to similar reshuffles in the past, suggesting that the market is taking a breather after the strong run over the past of couple of days which saw the major indices setting new all-time highs.
The latest controversial cabinet reshuffle news caused the rand to drop harshly on Tuesday. Then the currency dropped further on Wednesday. However, the effect on share prices were said to be more modest.
On Wednesday the rand traded at R13.45 to the dollar. This means that the rand is almost 1% weaker than the previous day. However the softer currency did very little for the dual-listed shares which normally rally if the rand is weak.
Analysts in the financial field say investors might also be moving to the sidelines in eagerness of next week’s medium-term budget. This could have a huge influence on future investment decisions, as it will give an important indication of how government plans to finance its growing budget shortfall.
The Industrial index lost 0.11% in early trade, while the financial index was 0.08% lower by mid-morning. The Resources index also lost ground and traded 0.11% softer.