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JSE slumps as it plays catch-up
June 17, 2011--The JSE posted steeper losses on Friday, defying global bourses as local investors caught up with their international counterparts. Mining stocks dropped particularly hard in reaction to lower commodity prices.
The JSE was closed for the public holiday on Thursday, when shares fell around the world, and the domestic market was accounting for that, said Kevin Algeo, portfolio manager at Imara SP Reid.
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Source: FIN24
Rand regains poise against dollar
June 17, 2011--The rand regained some of its poise against the dollar on Friday after the previous day's losses in a risk averse market, although selling pressure should persist into the weekend.
Traders expected volumes to be thin as some Johannesburg players opted to take Friday off for an extended weekend after South African markets were closed for the Youth Day national holiday on Thursday.
Government bonds recovered after Thursday's losses, with yields subsequently pulling back from three-week highs. The yield on the benchmark 2015 bond R157 traded 1.5 basis points lower at 7.565% while that for the 2026 R186 fell three basis points to 8.61%.
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Source: FIN24
Bonds remain firm in late trade
June 17, 2011--SA bonds remained firm in late trade on Friday, which a trader said was on the back of the strong rand and a bit of short covering.
Short covering activity is positive for prices as it means short sellers had to purchase securities to close out short sales.
By 15:50, the benchmark R157 bond was trading at 7.530% from its previous close of 7.570%. The R207 was bid at 8.390% and offered at 8.370% from 8.395%, and the R186 was trading at 8.590% from 8.610%.
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Source: FIN24
Commodities surge to boost Africa growth
June 17, 2011--The rally in commodity prices is expected to continue driving growth in most commodity-orientated African economies, said Imara Africa Securities analysts.
The commodity price rally was being driven mainly by strong demand from developing nations, in particular India and China.
"It appears to us that Bric (Brazil, Russia, India, China) nations are taking a lead in tapping into African resources to fuel and sustain their growth through aggressive investment strategies," said the Imara analysts.
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Source: FIN24
African private equity and the dragon in the room
June 16, 2011--Interesting article in this morning's (16 June) FT Tilt by Sid Verma on whether Chinese investors are squeezing out private equity investors. He cites a global PE fund manager who reportedly told yesterday's
(15 June) Africa Forum 2011 conference organized by Private Equity International (www.peimedia.com): “Chinese investment in infrastructure projects in the construction phase have phased out” the development of local engineering platforms, the infrastructure-focused domestic institutional base and local managerial expertise.”
Verma looks at criticism of Chinese projects which are often criticized because they are funded with cheap Chinese loans provided the work goes to Chinese firms, and sometimes linked to resource extraction. He argues that in many cases Chinese investment is going into the early construction phase rather than operating infrastructure. Therefore where there is a completed infrastructure project that could generate revenues (port, toll road, etc.) there is often a new round where investors could get involved in the management. He writes: “It is feasible that a secondary market for such projects could develop in the coming years as Chinese investors unwind their exposures once they hit the operating stage; and/or seek to change the risk profile of an investment; and/or maximise income from operations through a capital market refinancing.
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Source: African Capital MArkets News
Bonds weaker on rand and squaring-off
June 15, 2011-- South African bonds were weaker in late trade on Wednesday, which a trader attributed to the soft rand and squaring off of positions.
Markets will be closed on Thursday for the Youth Day public holiday.
By 15:50, the benchmark R157 bond was trading at 7.590%, from its previous close of 7.500. The R207 was trading at 8.395% from 8.330% and the R186 was trading at 8.620% from 8.540%.
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Source: FIN24
RMB: Rand 15% overvalued
June 15, 2011--Rand Merchant Bank (RMB) currency strategists said on Wednesday they believe that the rand "seems 15% or so overvalued", and forecast that the unit will start to weaken more substantially in 2012.
Currency strategists John Cairns and Nema Ramkhelawan said in a note that they expect the rand's strength to last throughout this year.
"However, given our expectation of an increase in the US Federal Reserve funds rate by the middle of next year, we maintain our core forecast that the unit will start to weaken more substantially in 2012."
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Weak US data, Greece woes hit JSE read more
JSE braces for futures close-out read more
Bonds weaken a bit after US PPI data read more
Source: FIN24
June 15, 2011--The JSE ended lower on Wednesday as local investors looked past the futures close-out and focused on persistent concerns over Greece and over downbeat US economic data, which pulled on stocks worldwide.
After the futures close-out the domestic bourse briefly firmed, but later gave up these gains and fell thanks to disappointing economic data from the US, said Kevin Algeo, portfolio manager at Imara SP Reid. The JSE will be closed for the public holiday on Thursday.
Source: FIN24
June 14, 2011--The JSE ended slightly firmer on Tuesday, but it underperformed its US and European counterparts despite positive economic data.
Resources, including Exxaro Resources [JSE:EXX], were big market-movers today, said Andrew Todd, an equity derivatives trader at Imara SP Reid, noting that futures-related activity dominated action on the local exchange. The futures close-out occurs on Wednesday.
Source: FIN24
June 14, 2011--South African bonds were slightly weaker in late trade on Tuesday, which a Cape Town-based trader said was on the back of a higher than expected US producer price index (PPI) figure.
"We're basically a bit weaker on the US PPI figure. The US equity market is looking stronger and the bonds are up - the US 10-year is at 306 from 301 this morning. The rand hasn't done much today; it's been stuck in a range," she said.
Source: FIN24
