ETF Trends
ETF Trends

South Africa’s exchange traded funds (ETFs) are dancing on reports of a lower jobless rate.

In the second quarter, the country’s unemployment rate fell to 23.1% and economic growth rebounded from a six-year low, reports Nasreen Seria for Bloomberg. Economic expansion hit an annualized 4.9%, up from 2.1% in the previous three months.

Employment within the mining sector rose the highest, by 3.9%, while transportation industry employment rose 3.6%. Unfortunately, Africa’s largest economy hasn’t increased jobs at a fast enough pace to slash unemployment, which has led to a rise in both poverty and crime. Skilled workers are in short supply, as well, making the government’s goal of slashing unemployment to 14% by 2014 a tough one to attain.

Inflation remains high: it hit 13% in July, up from 11.6% in June.

The rand is also up against the U.S. dollar for the second consecutive day. A weaker dollar helped lift demand for precious metals. South Africa produces 80% of the world’s platinum and 10% of the world’s gold, which tends to cause the rand to move in tandem with metals, report Mike Cohen and Garth Theunissen for Bloomberg.

  • NETS FTSE/JSE Top 40 Index (JNB), down 18.1% since May 22 inception
  • iShares MSCI South Africa (EZA), down 16.4% year-to-date
  • WisdomTree Dreyfus South African Rand (SZR), down 1.1% since July 8 inception

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.