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JSE closes weaker led by gold shares
August 23, 2011-- JSE stocks ended decidedly weaker on Tuesday, underperforming main global equity markers on the day, as gold miners led the downside.
The JSE briefly halted trading in the afternoon session as it lost connectivity on its international links to the trading system at the London Stock Exchange.
By 17:00 local time, the JSE All Share [JSE:J203] index finished 0.59% down to 29 259.86 points, led by a 2.32% slide in gold shares and a 1.30% dip in resource stocks.
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Source: FIN24
Rand holds steady against dollar
August 23, 2011--The rand held steady against the dollar in early trade on Tuesday and dealers were expecting a stalemate between bulls and bears for the rest of the week, while government bonds took a break from a sharp rally in the previous session.
The rand, which has tracked turmoil in global markets, is seen settling slightly this week as knee-jerk reactions subside and dealers wait for more clues on the global growth picture.
By 06:17 GMT the rand was at R7.1945, mostly steady against the dollar and off a close of R7.2025 in New York.
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Source: FIN24
The Cyclicality of Fiscal Policies in the CEMAC Region-IMF Working Paper
August 23, 2011--Summary: This paper examines fiscal cyclicality in the CEMAC region during 1980-2008. The issue has attracted very little empirical interest but is important if fiscal policies are to play a role in mitigating external shocks that exacerbate economic cycles across the region.
We assess whether fiscal policies across these six countries have been procyclical using panel data to elaborate our analysis. Like in other sub-Saharan countries, total public expenditure in the CEMAC is found to be strongly procyclical. This is most pronounced for public investment, which overreacts to output growth with elasticity above 1. We further find that institutional weaknesses and poor governance partly explain this behavior. In contrast, the existence of an IMF-supported program can be a counterbalancing influence in attenuating this bias.
view the IMF Working paper-The Cyclicality of Fiscal Policies in the CEMAC Region
Source: IMF
South Africa: The Cyclical Behavior of the Markups and its Implications for Monetary Policy-IMF Working paper
August 23, 2011--Summary: The study looks at the cyclical behavior of the markups and assesses its impact on inflation dynamics. The analysis finds that the aggregate level of the private sector’s markup is relatively high, thus pointing to the lack of strong competition in South Africa’s product markets.
Additionally, the results suggest that the markups tend to move in a countercyclical manner, with a short-term positive impact on inflation. This implies that the countercyclical pattern of the markups is one factor among others that contribute to the relatively weak output gap-inflation co-movement. In the context of South Africa’s inflation targeting framework, the counter-cyclical markups may also generate an asymmetric response of monetary policy to the fluctuations in economic activity.
JSE recovers in volatile trade
August 22, 2011--JSE stocks ended a little higher on Monday, tracking the positive sentiment on the main global markets.
The local exchange had opened the session lower before drifting into positive territory by midday. In the meantime, the spot price of gold continued to shine.
By 17:00 local time, the JSE All Share [JSE:J203] index finished 0.19% up to 29 433.12 points, led by a 3.16% surge in gold shares and a 0.95% jump in platinum stocks.
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Source: FIN24
Bonds rally as double-dip fears mount
August 22, 2011--South African bonds were firmer in midday play on Monday, which a trader said was on the back of growing fears of a double dip recession which have led market participants to change their views on interest rates.
By 11:50, the benchmark R157 bond was trading at 6.460% from 6.630% at the previous close. The R207 was bid at 7.475% and offered at 7.475% from 7.610% and the R186 was trading at 7.760% from 7.890%
The rand was bid at R7.2039 against the dollar from its previous close of R7.1870.
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Source: FIN24
JSE cuts losses to finish higher
August 19, 2011--The JSE rebounded from more than 500-point losses to finish the session positive on Friday, with banking stocks leading the upside.
By 17:00 local time, the JSE All Share [JSE:J203] index gained 0.31% to 29 378.69, led by a 2.03% jump in banks and a 0.96% rally in financials.
However, gold miners declined 0.66%, resources gave up 0.54% and platinum shed 0.97%, while industrials gained 0.83%.
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Source: FIN24
Gold soars as market mayhem deepens
August 19, 2011--An ugly sell-off in global stocks gathered pace on Friday, on mounting concerns the US economy is heading into another recession and as some European lenders faced a short-term funding crunch, highlighting the risk of a banking crisis.
Nervous investors fled to the safety of core government bonds, Swiss francs and gold, which hit a record high, with many seeking to unwind holdings of riskier assets such as stocks, commodities and higher-yielding currencies before the weekend.
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Source: FIN24
Bonds mostly weaker in late trade
August 19, 2011--South African bonds were mostly weaker in late afternoon trade on Friday, which a trader attributed to some profit taking after an "incredibly" busy week. The R207 was a touch firmer.
Continued interest in the local bonds by foreigners bolstered the market this week as global debt pressures mounted.
By 15:50, the benchmark R157 bond was trading at 6.690% from 6.660% at the previous close. The R207 was bid at 7.650% and offered at 7.665% from 7.665% and the R186 was trading at 7.900% from 7.940%
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Source: FIN24
Bonds maintain positive performance
August 18, 2011--South African bonds were raised slightly in afternoon trade with offshore accounts still buying locally.
Bonds have had a strong run on the back of global jitters that have fuelled significant foreign buying interest of local bonds.
By 15:21, the benchmark R157 bond was trading at 6.725% from 6.790% at the previous close. The R207 was bid at 7.745% and offered at 7.725% from 7.805% and the R186 was trading at 8.020% from 8.100%
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Source: FIN24
