Old Mutual Investment's Rian Le Roux says Minister Gordhan ticked many items on the budget wish list. But markets reacted with disappointment.
If you got more or less everything the market was looking for why did the rand sell off by thirty cents and the bond yields go up? So the assessment then was its not as good as we thought.— Rian Le Roux, Old Mutual Investments
There are two issues. One is the tax increase that we got in the budget was not as much as the market expected pre budget— Rian Le Roux, Old Mutual Investments
Another concern, says Le Roux, might be markets concern that there is a danger the economy will not meet the Minister's predicted projections.
I think what the market is overlooking is that we got more on spending cuts than was expected. A 12 billion rand cut in spending over the next fiscal year is a signal that government is getting better control over its spending.— Rian Le Roux, Old Mutual Investments