Dear Client

 

5 April 2017

 

Our early estimate growth nett of all fees for Kanaan Hedge FoF for March 2017, is 0.64%.

 

The Rand weakened late on Monday immediately after rating agencies SMP Global ratings cut South Africa’s credit rating to sub-investment grade, or junk status to BB+ from BBB-.  The currency reached 13.74 / USD as the news broke, 2.85% lower on the day.

 

Despite the shock on Thursday night, the Rand has done well to pull back from 13.60 /USD to trade at 13.50 / USD on Monday.

 

Analysts say markets are looking for more clarity on ANC policy and leadership issues.  If Zuma survive the onslaught, it would probably be seen as a triumph for state capture, but if he is ousted it would be interpreted as a victory for the sanctity of the constitution.

 

I think the managers of the underlying hedge funds of Kanaan Hedge FoF will follow an approach of wait and see, where they do have already a lot of hedging in place against the devaluation of the Rand.

 

Friendly greetings

 

Andre Delport