| Sappi led the gainers on the JSE yesterday, surging more than 12% despite a difficult second quarter and warnings of even tougher conditions ahead. The fashion industry is partly to blame for falling demand for dissolving pulp, which is used to make viscose. Still, its focus on higher-margin products is showing results, which may have supported yesterday's gains. AB InBev, the world's biggest brewer also rose, although not as spectacularly as Sappi. It too is exploring other avenues for sales, such as B2B and e-commerce, as its traditional channels remain constricted due to Covid-19. Fortunately, only a few countries have placed outright bans on alcohol sales. More on their latest earnings reports in your final newsletter for the week, along with results from Kaap Agri and updates from DRDGOLD and Premier Fishing and Brands. Also, all the latest M&A news from DealMakers. In "Lower for longer on rates?", Ingham Analytics poses an interesting question for investors. South Africa has falling short-term interest rates (good for your mortgage repayment, not so good for banks) and higher long bond yields (bad for the government budget deficit). Amid the Covid-19 lockdown, government debt is rising, and GDP is shrinking. So, there is this divergent interest rate situation, which is not typical in many countries. But, could this change? Could long rates fall? What are the implications? Get the report, complete with revealing graphs, here. Finally, is the coronavirus a potential killer blow for South Africa or is this an enforced opportunity to reset our common economic health and priorities? In his latest report, "South African economic and financial fragility", top trader Andrew Kinsey performs a basic balance sheet analysis of the key component pieces that make up the local economy, including the banking system. Understanding this and then relating that to our own circumstances and intentions provides insight on what the future could hold for us over the next two years at least. You can access it here. I hope you have a good weekend and take care if you're venturing out. Stephen Gunnion Managing Editor, InceConnect
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