The delicate state of the global economy could be rocked by an outbreak of swine flu, which has killed over 100 people in Mexico and infected many others in the United States, Canada, Spain and New Zealand. 

Underscoring the serious nature of an outbreak is a study conducted by the World Bank in 2008, which estimated a major swine flu pandemic could cost $3 trillion and cause worldwide gross domestic product (GDP) to plummet almost 5%.

"A nasty chill will run through the market…as people think back to the SARS virus," Justin Urquhart Stewart, investment director at Seven Investment Management, told Reuters.

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The elections are over now in South Africa and the ANC won the elections by sweeping 65.9% of the votes. The fact that the ANC did not get the two thirds majority vote need to be able to change the constitution is seen by financial analysts as a good thing. The ANC themselves may not be too concerned about not winning a majority vote as they probably have no intentions of changing the constitution but investors may see this as a good thing. Investors tend not to be keen on one-party states.

Many analysts are expecting the economy to remain the same even if Jacob Zuma is the president of the country. It is very unlikely he will make drastic changes to economic policy. The first thing Zuma may want to do is to make sure that Trevor Manuel and Tito Mboweni remain in their respective positions of minister of finance and reserve bank governor. These two have in many peoples eyes been behind the relative success of the South Africa economy.

What is critical though is that we as South Africans should not think we are immune to the global economic crisis. I have heard many people thinking that what is happening in the USA and Europe will not happen in South Africa. I beg to differ. We could possibly head the same direction as those countries currently struggling, if economic policies are not kept in check and thus the importance of good governance.

A lot of eyes are going to be focusing on the ANC in the upcoming months to see how they deliver. More so now that there is a larger opposition presence in National Assembly committees as well as a significant DA and COPE presence in the National Council of Provinces. The ANC failed to win the Western Cape vote which went to the DA. It will be interesting to see how the ANC handles the Western Cape as it is one the most richest and important provinces in South Africa economy.

Now that we know the ANC has won the elections and Jacob Zuma will be the next president of South Africa, everyone is waiting to see if current minister of finance, Trevor Manuel will remain as the minister of finance in the Zuma lead government. It would be really unwise for Zuma to get rid of Manuel who many people, including the important foreign investors, have faith in. There was a time, not too long ago, when some had thought that Manuel was going to step up after Thabo Mbeki was recalled, and that sent the markets into a frenzy as they feared that a departure by Manuel could cause chaos in the South Africa economy.

On Monday (27 April 2007), a senior official in the ANC said Trevor Manuel will continue to have a cabinet-level role in government thus quashing away the specualation that Manuel may be given another role which is not that of a minister. ANC treasurer-general Mathews Phosa, a former lawyer and ally of new South African President Jacob Zuma, said the final decision on Manuel’s future would be made in the next two weeks. I guess we just have to wait until then to find out exactly what is going to happen to Trevor Manuel.

On the day that ANC President, Jacob Zuma was decide not to be prosecuted by the National Prosecuting Authority (NPA) for alleged fraud, corruption, money laundering and racketeering, the rand did not react. Some of us had thought that this news may cause our local currency to take a knock as foreign investors may have reacted to this decision. But for now, the rand has not reacted; who knows, maybe in a couple of days or weeks, we will start to see movements in the rand, triggered by the Jacob Zuma decision. But it will be very difficult to say that the rand has dropped or gained strength becuase Zuma hs been cleared. The closest we could have got to see the rands reaction to this whole Zuma saga would have been today when then decision was made but alas the rand was not phased.

At 16:05 the rand was bid at 9.0458 to the dollar from an overnight close of 9.0310. It was bid at 12.1635 to the euro from a previous 12.2020 and at 13.4080 against sterling from 13.4085 before.

I guess at the end of the day, many expected the Zuma decision to go as it went, so business as normal, life goes on.

The rand reached a five and a half month high yesterday (Thursday) against the greenback this on the back of positive equity markets across the world following the news from the G20 summit that they have agreed to a deal making available more than $1 trillion in additional funds for leading international financial institutions, and laid the groundwork for a recovery of the global economy. The news from the G20 sent global equity markets soaring into positive territory. In South Africa, the JSE All Share index closed 3.19% in the positive whilst the rand was trading at 9.1350 against the dollar at 17:35, about 2.3% firmer than its previous New York close of 9.3505 on Wednesday. It touched 9.1102 earlier, its firmest level since October 15, according to Reuters data. Could this just be a sign that the world economy is starting to recover due to the G20 summit? Watch this space.

It is still no surprise that people are not buying cars in South Africa like they used to. Honestly, how many people can afford to buy a new car today with the economic hardships being faced? Yes, interest rates are coming down, but the smart person realises that this is not the best time to buy a car and would rather use that extra cash they saving from interest rate repayments for something else rather than a new car. South African new vehicle sales in March 2009 were down 30.3% year-on-year compared with a fall of 36.3% y/y in February, figures from the National Association of Automobile Manufacturers of South Africa (Naamsa) on Thursday (2 April) showed.

Statistics show that in March 2009, new car sales were 21 282 units reflecting a decline of 6 508 units or 23.4% compared to the 27 790 new cars sold during March 2008. Even on the car export front, things are not looking great. Exports of South African manufactured motor vehicles during March 2009 were 17 896 vehicles, a decline of 5 061 vehicles or 22.0% compared to the 22 957 vehicles exported during March last year. Yet again, no surprise in this figure as most cars exported from South Africa are for the European, Japan and ISA markets and we all know what they are going through with the credit crunch!

It looks like it is not only South Africa which is cutting interest rates of late. The European Central Bank (ECB) decided yesterday (Thursday) to slash interest rates again. European Central Bank President Jean-Claude Trichet, cut the banks benchmark interest rate by 25 basis points to 1.25% and it could still be lowered further next month as they try to find a way to help the struggling European economy. The ECB has now reduced interest rates by 3 percentage points since early October. At 1.25 percent, the main rate is the lowest since the ECB took charge of monetary policy in 1999.

Trichet said the key rate may be reduced further “in a very measured way.” The deposit rate, which the ECB cut to 0.25 percent, is at “an extremely low level” and has probably reached its floor, he said. The ECB is allowing the deposit rate — the rate it pays banks on overnight deposits — to steer short-term market borrowing costs. This from a report on Bloomberg.