Archive for the What the Experts say Category

Efficient Research – Red Day (also) for Resources

The market, at present, contains sufficient elements to make the informed investor nervous, (not to speak about the uninformed), but it is important to keep the original intention of investing into the market uppermost in our minds and not allow ourselves to be distracted by only the negative news on the surface.  Beneath it all, significant positive outcomes are being realized. From these levels (and it could go lower) we’ll undoubtedly be able to unlock some significant growth opportunities when the market turns.  The effect of increased interest rates, for example, are also filtering through and slowing down consumer spending significantly, which in due course should have the desired effect on further bringing down inflation. 

Back at the market, however, Efficient Research shows that “The JSE All share was (again) dipped in red yesterday, closing 3.11% lower (28 392).  An array of bad news was doing the rounds in the market, including U.S. markets being in bear territory, record oil prices, declines in consumer confidence worldwide and tighter monetary environments”. Read on

SOUTH AFRICA

Professor Chris Harmse and his team have the following to say: “Economic growth is slowing, the currency is on a declining trend, inflation is increasing and interest rates are set to increase further. Though enough cause for pessimism, it also forms part of the economic rebalancing package. The end result will be a sounder economy.  Another factor to be watched closely is international developments in interest rates. Should rates increase in the EU and US, it might lead to an outflow of portfolio capital which will contribute to the rand depreciating. Should the depreciation be severe, interest rates might have to be increased beyond August”. Read on

Efficient Research – Surprise, Surprise!

The JSE All share enjoyed the surprise announcement by the SARB of (only) a 50 basis point hike in the repurchase rate to 12.0%  The market was expecting a 100 basis point increase and Financial (+1.61%) and Banking stocks (+1.49%) recovered earlier losses.  On the domestic front, given that the market had already priced in 100 basis points, some reshuffling can be expected to continue today. This adds to our view that the Governor missed an opportunity to hit inflation hard, as the market was already anticipating a strong rise. Read on

Efficient Research – Inflation Worries

The JSE all share closed 0.79% in the red yesterday (32 208.96), dragged down by a worsening inflation outlook and softer commodity prices.  The Consumer Price Index excluding interest on mortgage bonds, namely CPIX, increased 10.4% (y:y) in April – higher than the market’s expected 9.9% y:y rise.  The Governor of the Reserve Bank, Mr. Tito Mboweni, gave a strong warning to the market yesterday, saying that interest rates might be increased with as much as 200 basis points at the next MPC meeting in June.  Although we do not anticipate this to happen, the possibility of a 100 basis point hike is on the rise. Read more

What the Experts Say May 2008 Economic & Market Analysis

The signs are clear to me, as a Financial Advisor, and seen from the view point of some very highly qualified analysts, that this is a time to hold on to your shares or market-linked investments.  Professor Chris Harmse says the following:  “In the March issue of technical analysis, the following was forecast: ‘I am of the opinion that after this current correction that is now taking place the Top 40 index will push through the October 2007 highs and make new all-time highs.”  “As can be seen from the chart above, (see page 3) the Top 40 index did indeed push through the October 2007 high.  Technically, the market is in an upward trend and should continue for the next few months. The Top 40 index will be at risk, should it fall below the upward trend line.  Investors should, however, HOLD and not sell their shares.”  Read more

Efficient Research Another Record!

The JSE all share closed on a new record of 32 153.48 points yesterday – breaking the previous high recorded on Tuesday by 224.39 points.  The bourse was supported by stronger commodity prices, a slightly weaker rand as well as good results released by miners this week.  Read on

Double Digits!

StatsSA released the March consumer inflation data today, reporting inflation of above 10% in both the CPI figure, 10.6% y:y,  and CPIX figure, 10.1% y:y.   In February these figures reported y:y rises of 9.8% and 9.4%, respectively.  These double digit numbers are indicative of the escalating inflation pressure in the economy.  Read on

Reserve Bank even has doubts about rate hikes

The attached report regarding inflation appeared in the Business Day today.

Read the report

THE CHANGING LANDSCAPE OF INFLATION: FACTS AND FIGURES!!!!

The following article by Prof. Chris Harmse (Republished with the kind permission of Dynamic Wealth), makes interesting reading.

From January 2009, South Africa will enter another new era in the measurement of inflation, and this era is likely to have a dramatic impact on South Africa’s inflation rate. This change stems from the proposed reweighting of the goods and services in South Africa’s inflation basket.  Continue reading THE CHANGING LANDSCAPE OF INFLATION: FACTS AND FIGURES!!!!

STAGFLATION CONCERNS GROW, BUT SA’S LONG-TERM PROSPECTS BRIGHT

OMIGSA’s Chief economist, Rian le Roux, explains the risks of stagflation and why the current situation in South Africa should not deteriorate into anything as bad as the 1970’s and 80’s. Continue reading STAGFLATION CONCERNS GROW, BUT SA’S LONG-TERM PROSPECTS BRIGHT

Interest Rate Debate

“The stronger than expected manufacturing figures is another curve ball in the interest rate debate as it indicates that GDP growth could be less affected by the electricity crisis” says economist, Fanie Joubert.  Read more about the background surrounding this statement and “the manufacturing sector which remains more resilient than expected, especially in light of the recent power problems.” Continue reading Interest Rate Debate

Economic and Market Analysis 7 April 2008

Positive prospects for the US housing dilemma, as well as less recession woes boosted positive sentiment on world share markets last week.  Read more

Executive Summary of Stanlib’s Weekly Focus by Paul Hansen

TOUGH QUARTER FOR EQUITIES & PROPERTY ALMOST OVER

Weekly Economic and Market Analysis by Prof Chris Harmse

Professor Chris Harmse’s Economic and Market Analysis always provides some interesting reading. Read on

The FED’s not panicking, and neither should you.

This article by Candice Paine was published on 18 March 2008. 

Yesterday (Monday 17th) was a remarkable day for global stock markets. At one stage the All Share was down over 4% and Financials down over 6%. The market recovered somewhat towards the end of the day to close just over 2% down.

The sudden fall and partial recovery was driven by the near-collapse of Bear Stearns – the fifth largest US Investment Bank. Read on