Recent political developments within South Africa have been well received by the investment community. Business confidence reached 96.4 points in December, signalling improved optimism for the year ahead, in our view. The frenetic Black Friday promotional period bore fruit for the broader market with strong retail sales performance. The local Consumer and Producer Price Index remained stable in December 2017, while manufacturing (the ABSA Purchasing Managers’ Index) shed 3.7 points in December. Sentiment regarding the current political atmosphere is reflected by the rand, which clawed back an additional 4.1% in January, this recovery has led to lower fuel price expectations for February.
