RBC Sees Initial Budget Price Action Depending on Headline Fiscal Metrics

• Rooftop solar investments: The incentives need to capture a wide range of potential users in order for this to contribute to tackling the power crisis (govt plans >850MW to come online this year from rooftop solar = almost one stage of loadshedding).
• Eskom: They think the key question for markets is whether the debt transfer will successfully allow Eskom to address its financial and operational challenges.
• Social grants: There are questions about the size of any basic income grant that the government is considering and how that will be financed to not compromise an already strained budget.
• Public wage bill: The government has shown political will in holding its line in containing the public wage bill – RBC expect this to remain the case, but the risk of higher than expected spending on this category cannot be ruled out

Full MNI Preview including summary of sell-side views here: https://roar-assets-auto.rbl.ms/files/51434/MNISAB...