It’s not a pretty picture for global markets at the moment – and if the US-China trade war continues, Brexit isn’t solved and we still have the protests in Hong Kong, there is a big possibility Q4 will be negative. That’s the view of Mike Schussler, CEO of Economists.co.za, who believes Brexit could have immense impact on South African markets – particularly if the United Kingdom leaves the European Union without a deal. “We’re already seeing a slowdown in Europe and it is very likely that Europe is already in a recession,” said Schussler. “Although China is the single most important country for our trade, as a trade bloc Europe is our biggest trading partner. So obviously it’s an issue that will affect us.” Schussler’s comments come in the wake of UK Prime Minister Boris Johnson’s lastditch proposal for a divorce from the EU as he prepares for D-day on October 31. This despite serious problems, particularly with regard to Britain’s border with the Republic of Ireland. On the other side of the globe, protests in Hong Kong have also caused instability for the region’s industry. This because China is the world’s largest manufacturer of goods – and Hong Kong is a gateway to China for many products. Schussler believes we’re already feeling the effects of international trends, with the ocean freight sector in particular feeling the pressure. “There definitely is an ill wind blowing onto South African shores.” He said the breakbulk sector had recorded its sharpest decline in over a decade. “I’m closely monitoring bulk exports, and our bulk is still okay, but if it starts to turn it could be detrimental for us as breakbulk is the lowest it has been in ten years.” Schussler said that instability in international markets could not subside fast enough for South Africa after a flat third quarter. He believes volatile global markets could see local markets suffering in Q4.
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Volatile global markets could see local markets suffering in Q4. – Mike Schussler
