The Rand has been given a welcome boost from central bankers intensifying accommodative monetary policy that will keep interest rates lower for longer. This week central bankers from America, UK, New Zealand, China, Switzerland will be releasing interest rate announcements or provide additional information relating to recent announcements and economic outlooks.
More information on the potential for negative interest rates and the expected impact on growth, inflation, and employment should be released over the coming weeks.
One thing is certain, money will become cheaper, which will be positive for the stock market and risk assets.
The Rand has made a strong rally and we should see a repeat of the spectacular recovery after Nenegate. You should be using the strength to align your investments and as Francois
indicated in his MoneyMorning
article last week, you need to align your offshore allocation for impending regulatory changes.
In the local market, we’re on the lookout for shares that are trading at prices that don’t reflect the full potential of the company and an economic recovery that will take place. These shares are akin to the “baby being thrown out with the bath water”.
As soon as we uncover an opportunity, we’ll let you know.
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Recent Ideas Update…
Naspers Bounce runs out of steam
Naspers gapped up as expected but failed to keep running as the Rands bout of strength put rand hedge shares on the back foot.
This has given investors the opportunity to buy Naspers lower down near a strong support level that’s building.
Buy Naspers below R2,900 for a move above R3,200.
MTN’s break below upward trend channel
should be temporary
MTN has broken below its upward channel but this should be temporary, and it should rally on the positive market sentiment. Our target price remains at R75, and it could be raised higher.
Investors without MTN in their portfolio should add MTN at these levels. We entered at R57.50.
Here’s the entry levels…
• Buy Blue Label below R3
• Buy EOH below R5.50
• Buy Distell below R77.50
See you next week.
Contributing Editor, Money Morning