If anyone has proof that a CEO took over a behemoth of a company and turned it around in 3 months - I'd want a masterclass with that person. Which is why I'm a bit concerned that people expected Ramaphoria to take effect a mere 3 months after he was elected president. Yesterday, GDP numbers came through lower than expected. Bloomberg consensus had expectations at -0.5% for annualised QoQ numbers and 1.9% for YoY numbers. Instead, we got -2.2% and 0.8% respectively.
The impact was almost immediate. The Allshare took a knock, with Bidvest (-5%) and Barloworld (-5.2%) taking the biggest hits straight after the GDP numbers came out. Later, however, this was muddied by an emerging market sell-off, which resulted in a bigger dip and adverse impact on banks and retailers. Today, South Africa's business confidence numbers came out and that came in two points lower than April's number. This has been the fourth consecutive fall since it hit a two-year high in January.
Looking at these numbers, one gets the sense that reality is finally setting in for South Africans. The economy needs a lot more than mere sentiment to grow and the work is only just beginning.
Sure, it’s disheartening to see the rand soar towards R13.00 after we dipped below R12.00 for the first time since 2015. But such short-term focus on the movement in the market will only end in heartache.
We must take our eyes off day-to-day market movement because we will be disappointed. You can even look away from the economic numbers and focus on JSE trading volumes. For most of May, daily trade volumes stayed well below the average – and that’s indicative of a sluggish environment.
So, with the rose coloured glasses finally off, let’s start focusing on the work that needs to go in to turning this economy around. It will not happen with a simple shuffle in leadership. Concrete steps need to be implemented and, until we are well into this process, hoping that the change will be magical is wishful thinking.