According to a poll by Kantar Public, Cyril Ramaphosa's support as next ANC president rose to 43% in November from 36% in August. He is also leading the nominations, Ramaphosa has an over 500 branch lead. A lot can still happen in the next few weeks, so, watch this space. As the saying goes, plan for the worst, hope for the best.
Additional tail winds for a global rally is the traction being m... ››› more
Last week South Africa side stepped the exclusion from the World Government Bond Index, as Moody's didn't downgrade its local currency. Instead, Moody's placed South Africa on Credit Watch. This is a period of up to 90 days where it critically evaluates any material changes and can downgrade SA at any-time.
S&P downgraded SA, which sparked panicked selling of the rand after the JSE closed, but... ››› more
Moody's and S&P ratings agencies will be announcing if they drop SA's credit ratings one more notch after the market closes on Friday.
Although Moody's signaled, it wouldn't be making any serious decisions before the 2018 budget, we had Minister Gigaba's mini-budget confirmed that South Africa's in crisis.
A strong focus is one of the core Pillar's Moody's considers when making a decision.... ››› more
President Zuma is trying to curry favour with supporters by investigating solutions to the “free” education agenda. The cost of this “free” education is an almost certain downgrade and the resignation of Michael Sachs. The Rand responded by weakening 20c yesterday.
We've been cautioning investors, to have an appropriate amount of their investable assets exposed to offshore investments.... ››› more
It's interesting to see how interest in Bitcoin has increased. Searches on Google for the “Bitcoin price” have increased sharply since 2016.
Below is a chart of the Bitcoin price in US Dollars and the volume of searches in Google.
Source: Prodigy Asset Management, Google Trends and Coin Desk
As you will see, the higher the volume of ... ››› more
I banked returns of 100%, 225% and 585% on this Money Manager before and it's time to do it again.
You see, I first bought a boat load of this company's shares for my clients when it IPO'd in 2014 at R3.05, followed by purchases all the way up to a little over R9.00. I started selling as it rallied above R16 and made them phenomenal returns in a very short period. We are still holding a small p... ››› more
News flow seems to have subsided for now, markets continue to grind gradually higher. The JSE added 1% last week on the back of stronger commodity prices; Brent recovered 3,4% after trading softer for several weeks.
Internationally, markets continue in a holding pattern; testing new highs. Commodities are responding to a weaker dollar and US Markets stumbled for the second time on new challen... ››› more
Global Markets are busy digesting the UK election results, which indicated the Tories have lost their small majority. The UK now sits with a Hung Parliament, which will see the UK enter the Brexit negotiations set to start next week on the back foot. It will be interesting to see if the EU takes a harder line with them than previously expected. The weaker pound should buoy the FTSE. The ECB left i... ››› more
The JSE managed to etch up a 1.3% gain last week as there was very little driving markets. Volatility is at record lows yet uncertainty is high, the market is taking a wait and see approach.
Inflation came out a little higher in May at 5.4% versus 5.3% in April. This remains within the MPC's target range.
The Public Protector's report is being challenged and the Mining Charter kickback is... ››› more
The JSE's Top40 index closed the first half of the year slightly positive at 0.8%. The Industrials were the leaders of the pack as the only major sector to rack up a positive return of 6.4% while resources were underwater by 9.6%.
The entire market has been propped up by a handful of top performing shares like Naspers, Richmont, BATS, BidCorp, Mondi and Capitec. The interesting thing to note i... ››› more
The Rand continued its slide last week as news emerged that Nationalising the Reserve Bank was discussed at the ANC conference.
Investors are not amused by the uncertainty the ruling party are creating, which is a recipe for further downgrades. And as mentioned in prior weeks, if our local currency and debt are downgraded we could see sustained Rand weakness. Bond yields would also spike as in... ››› more
Before we jump into what the market did and what you should look out for this week, I would like to mention a few interesting retirement articles you should consider reading.
This week's Business Times had some excellent articles by Laura du Preez on Retirement Planning, take note of the following:
New disclosure of RA costs is highlighting rampant abuse in this area
How a ... ››› more
Last week's interest rate cut of 25 basis points (0.25%) has boosted retailers and shares with high debt levels. Improving sentiment and the prospect of a boost to economic growth provided support for the Rand.
Earning season is in full swing, as of Friday, 19% of the companies in the S&P 500 had reported results for Q2 2017 and 73% had beaten earnings and sales expectations.
In the we... ››› more
Global stocks are making record high after record high on the back of monetary policy that remains accommodative globally, inflation that's surprisingly low, the oil price below $50 and improving manufacturing data.
All this positivity is feeding into investor sentiment and it appears the rally that started out as a “Trump Bump” is growing stronger daily.
Locally, it's all about confid... ››› more
The JSE's rally from late June accounts for all the growth we've seen this year.
The bullish tone is threatening a break above the trading range which has confined the market for more than three years.
As in common at this stage, small caps and midcaps have lagged significantly and we expect them to play catch up.
Mid-caps to consider include: MicroMega, Santova, AdvTech and AECI.
**... ››› more
Global markets have retreated over the past week as tensions rose on Trumps threats directed at North Korea.
Tensions will subside and global markets will continue their rallies on the back of positive earnings surprises.
The big earnings release for our market will be Tencent's (due to Nasper's stake in it) that will be released in the early hours of Wednesday.
All 32 major analysts tha... ››› more
While everyone was looking for clues as to the future of easy monetary policy, both Janet Yellen and Mario Draghi kept mum at Jackson Hole.
Both speeches were taken as more dovish, which implies accommodation to continue for longer. This has seen the Rand trade below R13 to the USD, the strongest level for August and the Euro trade at its strongest level against the USD in 30 months.
CPI c... ››› more
The major news is today's GDP growth figure for the 2nd quarter. The print should come out at 2.6% and signal a short-lived recession.
The Rand's strength was given a boost after poor jobs numbers out from the US on Friday, but has started consolidating around R12.95. We believe clients should use the current strength to allocate an appropriate portion of assets to offshore markets. - Contact ... ››› more
We had a good week for our short-term trades.
• Sasol for a 6.71% gain
• Vodacom for 10.33% gain
• Sibanye for a 30%
All ungeared, see position updates below.
Paying too much for your retirement savings?
The weekend press has again highlighted the impact of costs your retirement savings. Most older policy are paying the industry norm of 3% and higher. It’s a littl... ››› more
This might be the most important week for determining the market direction for the rest of the year, we have:
• A Fed announcement on their tapering on Wednesday
• A SARB announcement on interest rates om Thursday
• Futures closeout on Thursday
The market is expecting (with a 98.6% probability) the Fed to not pull the trigger on an additional rate hike. On the flip side, local inte... ››› more
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