Simon’s weekly wrap: Is SA already in a technical recession?

Copper demand is only going to be increasing in the decades ahead as it is a critical part of green energy. I spoke with Jan Nelson from soon-to-be-listed Cooper 360 about the increasing demand and its mining operations which already produce some 2 000 tons a year ramping up to over 8 000 in time.

I spoke with Absa senior economist Miyelani Maluleke on the lender’s view of the economy, and he says we’re likely already in a technical recession. They expect a negative quarterly GDP print for both the last quarter of 2022 and the first quarter of this year. The good news is they expect inflation to have peaked and think we may see rate cuts in September and November.

Craig Ivy of Futuregrowth had great insights into the listed credit market when I spoke with him. A feature of the market is low liquidity, but lenders are returning, and the big data point was a marked increase in green loans with the last two years seeing a significant jump, albeit off a low base.

Jacques Plaut of Allan Gray had some interesting ideas on how we should think about investing and what we should be focusing on, often not what we’d expect. For example, the iron ore price is going to be driven by the Chinese housing market as sales plummet and the home builders continue to struggle with large piles of debt they can’t fund right now.

Also this week, even as the rand weakens, fair value remains R16.50. Unfortunately we may see more interest-rate increases overseas and domestically, says Wayne McCurrie from FNB Wealth and Investment.