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The SA Daily 19 June 2019

Second SONA on stage

Shireen Darmalingam

  • President Ramaphosa’s second State of the Nation tomorrow at 19h00 will be watched for clarity on government’s reform priorities and the plan to deal with Eskom’s funding crisis.
  • Our political analyst notes that this SONA will provide President Ramaphosa the opportunity to counter the policy uncertainty generated by recent discussions about SA Reserve Bank independence.
  • We expect an emphasis on policies planned by the president in the coming years; timelines of implementation will be noted, which will guide sentiment.
  • Sentiment will also take direction from economic and infrastructure policies. There will also be a strong focus on SOEs, particularly Eskom, as well as sectoral growth initiatives that recently appointed economic cluster cabinet ministers are to pursue in the months ahead.
  • Our constructive medium-term forecasts for the rand, local bonds and growth are premised on traction with these planned reforms.
  • We expect the rand to firm to R13.80/$ by year-end, premised on constructive reforms.
  • We still see the rand as undervalued for the foreseeable future due to risk factors such as the situation at Eskom as well as global headwinds and risks.

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