The JSE and finance forum for South Africa
General Category => Shares => Topic started by: Moonraker on August 20, 2013, 05:27:41 pm
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All our woes in a nutshell. Interest rates should really be increased to counter some of the outflows.
No Peace at Mines Exacerbates Risk: South Africa Credit (http://www.bloomberg.com/news/2013-08-20/no-peace-at-mines-exacerbates-default-risk-south-africa-credit.html)
More than a year after South Africa’s worst mining violence since the end of apartheid, platinum mines are still striving to restore peace, a factor driving up the nation’s default risk faster than for emerging-market peers.
Current account and fiscal deficits, slower economic growth and the lowest interest rates in more than 30 years leave South Africa vulnerable to external shocks, Mphaphuli said. The nation needs average inflows of 16 billion rand ($1.6 billion) a month to finance the shortfall on its current account, according to Standard Bank Group Ltd. (SBK), Africa’s largest bank.
Foreign investors have sold a net 6.23 billion rand of bonds since May 22, when Federal Reserve Chairman Ben S. Bernanke said the U.S. may reduce monetary stimulus that has helped boost demand for emerging-market assets. Inflows have dropped to 24.8 billion rand this year, compared with 63.1 billion rand a year earlier, according to JSE Ltd., which runs the nation’s stock and bond exchanges.
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We will trundle along as we have done under Zuma until he is retired, removed, gone. Big business are in limbo until clear economic policies are there to encourage growth coupled with a revision of the more onerous labour laws. Cut the red tape for small business & if possible get the stealing down to R10 billion per annum. Sorry to see Vavi plot his own downfall as this will embolden Zuma even more. Lets wait and see who emerges front & centre at the 2014 trough.
If Marcus does raise rates banks & credit retailers will be a screaming short.
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We will trundle along as we have done under Zuma until he is retired, removed, gone. Big business are in limbo until clear economic policies are there to encourage growth coupled with a revision of the more onerous labour laws. Cut the red tape for small business & if possible get the stealing down to R10 billion per annum. Sorry to see Vavi plot his own downfall as this will embolden Zuma even more. Lets wait and see who emerges front & centre at the 2014 trough.
If Marcus does raise rates banks & credit retailers will be a screaming short.
A sane RBG should really see the need to raise rates. Our real rates are negative whereas in the US they are postive to the tune of nearly 3%.
That coupled with a weakening Rand, and 6.3% CPI (latest), and no one should be surprised that funds are being 'repatriated' to the US and to
a lesser extent to some Eurozone countries. An increase in rates would help to stem the ouflow and our JSE would not suffer unduly. ROE would
then also turn, but that depends on other variables as well, like the current account deficit and the points you have mentioned.
No gain without pain as they say at the gym.
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Rand will be closer to R11/$ by year end - expert (http://www.fin24.com/Markets/Currencies/Rand-will-be-closer-to-R11-by-year-end-expert-20130821)
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Rand will be closer to R11/$ by year end - expert (http://www.fin24.com/Markets/Currencies/Rand-will-be-closer-to-R11-by-year-end-expert-20130821)
and another take pro a stronger Rand.
Don’t write the rand off yet – economist (http://www.fin24.com/Economy/Dont-write-the-rand-off-yet-economist-20130822)
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We will trundle along as we have done under Zuma until he is retired, removed, gone. Big business are in limbo until clear economic policies are there to encourage growth coupled with a revision of the more onerous labour laws. Cut the red tape for small business & if possible get the stealing down to R10 billion per annum. Sorry to see Vavi plot his own downfall as this will embolden Zuma even more. Lets wait and see who emerges front & centre at the 2014 trough.
If Marcus does raise rates banks & credit retailers will be a screaming short.
A sane RBG should really see the need to raise rates. Our real rates are negative whereas in the US they are postive to the tune of nearly 3%.
That coupled with a weakening Rand, and 6.3% CPI (latest), and no one should be surprised that funds are being 'repatriated' to the US and to
a lesser extent to some Eurozone countries. An increase in rates would help to stem the ouflow and our JSE would not suffer unduly. ROE would
then also turn, but that depends on other variables as well, like the current account deficit and the points you have mentioned.
No gain without pain as they say at the gym.
Interest-rate swaps show investors expect South Africa and India’s benchmark rate will increase by at least 0.25 percentage point, or 25 basis points, by year-end, according to data compiled by HSBC Holdings Plc. In Brazil, policy makers are forecast to raise the key rate by 100 basis points to 10 percent, and Turkey will lift the benchmark one-week repurchase rate by 200 basis points to 6.5 percent, the data show.
Politics should never play a role. Markus must increase.
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I'm not at all aware of the economy or financial situation in Turkey or India. So can't comment. Although India seems to be taking pain currency wise, possibly worse than the rand...? Brazil hosting the soccer world cup surely should give their economy a boost, correct me here or advise, is Turkey not joining the EU..? Do the respective countries that are mentioned in your post are their rulers in power by such a margin as the ANC.
Now that we are in an arena where economic stimulus is all around "Abe-nomics" being the most recent, the distinction between politics & central banks behaviour has been blurred where markets react to political appointments ( in the west that is ) who favour "loose" monetary policies & vise versa.
Should the HSBC report become reality it would be interesting to see if they attract a larger portion of foreign direct investment.
I haven't changed my view from my previous post on this thread. While strike season is in full swing it's only natural at present to be a little more pessimistic. I have changed my holdings slightly over the past 6mths to reflect the way I see things evolving in the mid term.
Marcus speaking out like she did & using the dialogue that she used was a slight to the official party line. I don't know if she could raise rates without some kind of approval from Lithuli House. The fact remains that there are so many people at risk of a rate hike as opposed to those that would benefit.
I hold shares in Net1 ueps check their SENS & company releases to see the true picture of beneficiaries of state welfare..!
Now I'm about to rant about youth wage subsidy / proposed national health thingy jiggy. :mad:
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S. Africa Manufacturing Rises at Slowest Pace in 5 Months (http://www.bloomberg.com/news/2013-10-10/s-africa-manufacturing-rises-at-slowest-pace-in-5-months.html)
South African manufacturing rose at the slowest pace in five months in August as strikes curbed production in Africa’s biggest economy.
Growth in factory output slowed to 0.2 percent from a revised 5.5 percent in July, Pretoria-based Statistics South Africa said on its website. The median estimate in a Bloomberg survey of 11 economists was 1.2 percent. Output decreased 3.6 percent in the month.
No surprises there.
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South Africa to Take 20% Free Stake in New Oil Projects (http://www.bloomberg.com/news/2013-10-10/south-africa-plans-to-take-20-free-stake-in-new-oil-projects.html)
“The first 20 percent will be the free carried part by the state,” Shabangu told reporters today in Pretoria, the capital. While the government will be able to increase its interest to 50 percent, it will have to acquire 30 percent at market-related prices, she said.
Changes to the law “may significantly impact on the ability of investors to continue exploration in South Africa,” Russ Berkoben, president of Exxon’s local unit, told lawmakers in Cape Town on Sept. 11. The government “is sending a message to investors that their high-risk investment will have a much lower reward.”
( Apologies for, more often than not, being the bearer of baaaad news ).
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I don't mean to be a pessimist but this is regarding the ZA economic outlook.Im looking at Zimbabwe,and Im looking at South Africa.How far off are we from Zimbabwe?
If the best profit we/me can make on long term financial investments is around 30% PA(which would be great if inflation wasn't so much),is it really worth investing?
What about investing in housing?Since housing doesn't require tax under the 3 year mark cgt,wouldn't it be more profitable to buy and sell houses?
I don't know,Im just speaking from a completely economically uneducated mind ,but I thought I would give this thread a bump since its kinda important.
Would investing in other countries be more profitable in the long run,due to their lower levels of inflation?
Once again,just throwing things out there to bump the thread,I don't know much about half of what I just said.
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Buying and selling property is trading for revenue and will be treated as such.
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If the best profit we/me can make on long term financial investments is around 30% PA(which would be great if inflation wasn't so much),is it really worth investing?
Wow, I can see why you call yourself Delusionsofgrandeur :) Give me 30% pa any day, and I will beat the JSE ALSI to hell and gone, and you can throw in inflation as well. If measured in $ returns, well that would still not be a train-smash.
(PS. buying and selling houses is a crappy way to invest).
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The inclusion of trade data for Swaziland, Botswana, Lesotho and Namibia (SACU member countries), has almost halved the
trade deficit, which includes the current account deficit. The timing is a mystery; why only now ?
Some see window-dressing in S. Africa data changes (http://www.sharenet.co.za/news/Some_see_windowdressing_in_S_Africa_data_changes/7843dc329584caf33a043ed46c6a392f)
Anyway that, and Janet Yellen are the reasons for the stronger Rand these past couple of days.
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The inclusion of trade data for Swaziland, Botswana, Lesotho and Namibia (SACU member countries), has almost halved the
trade deficit, which includes the current account deficit. The timing is a mystery; why only now ?
Some see window-dressing in S. Africa data changes (http://www.sharenet.co.za/news/Some_see_windowdressing_in_S_Africa_data_changes/7843dc329584caf33a043ed46c6a392f)
Anyway that, and Janet Yellen are the reasons for the stronger Rand these past couple of days.
You think the rand will increase in value or even plateau at this point in this year?When will it start to steadily strengthen?Hard to speculate ,right.Not even 24 hours after your comment the rand took a little dip after its peak.
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The inclusion of trade data for Swaziland, Botswana, Lesotho and Namibia (SACU member countries), has almost halved the
trade deficit, which includes the current account deficit. The timing is a mystery; why only now ?
Some see window-dressing in S. Africa data changes (http://www.sharenet.co.za/news/Some_see_windowdressing_in_S_Africa_data_changes/7843dc329584caf33a043ed46c6a392f)
Anyway that, and Janet Yellen are the reasons for the stronger Rand these past couple of days.
You think the rand will increase in value or even plateau at this point in this year?When will it start to steadily strengthen?Hard to speculate ,right.Not even 24 hours after your comment the rand took a little dip after its peak.
Have a look at Sudden and severe tapering by the US Fed could crash the rand (http://www.moneyweb.co.za/moneyweb-the-money-whisperer/coming-to-a-horror-theatre-near-you--the-fragile-f) by Magnus Heystek
We will see a weaker Rand in 2014 - anything between 10.50 to 12.00 to the US$ depending on whether tapering is mild or severe.
I agree with Heystek on that. However I don't fully agree with his comments on listed property, due to the 7% average consensus prognosis
of distribution increases in 2014 (unlike with bonds where your yield is fixed). Maybe a 20% max. decline is what one could expect.
You should be in rand hedge stocks.
If you are living in, what was it, S. Korea ? - why bother with our market ?
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The inclusion of trade data for Swaziland, Botswana, Lesotho and Namibia (SACU member countries), has almost halved the
trade deficit, which includes the current account deficit. The timing is a mystery; why only now ?
Some see window-dressing in S. Africa data changes (http://www.sharenet.co.za/news/Some_see_windowdressing_in_S_Africa_data_changes/7843dc329584caf33a043ed46c6a392f)
Anyway that, and Janet Yellen are the reasons for the stronger Rand these past couple of days.
You think the rand will increase in value or even plateau at this point in this year?When will it start to steadily strengthen?Hard to speculate ,right.Not even 24 hours after your comment the rand took a little dip after its peak.
Have a look at Sudden and severe tapering by the US Fed could crash the rand (http://www.moneyweb.co.za/moneyweb-the-money-whisperer/coming-to-a-horror-theatre-near-you--the-fragile-f) by Magnus Heystek
We will see a weaker Rand in 2014 - anything between 10.50 to 12.00 to the US$ depending on whether tapering is mild or severe.
I agree with Heystek on that. However I don't fully agree with his comments on listed property, due to the 7% average consensus prognosis
of distribution increases in 2014 (unlike with bonds where your yield is fixed). Maybe a 20% max. decline is what one could expect.
You should be in rand hedge stocks.
If you are living in, what was it, S. Korea ? - why bother with our market ?
I see.I tried the South Korean market,but the language barrier is a problem,making acquiring any type of information regarding trading and investing , let alone sharing tips in English a bit of a problem. I'm also thinking of the market in Hong Kong,foreigners are allowed to trade there If I am not mistaken.But I know nothing about that so I will have to do some research.
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Just for fun, here's the South Korea top50 and the JSE top 40 for the last 10 years, JSE is in black:
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=XX%3aTOPI&uf=0&type=64&size=4&sid=1181261&style=370&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=13&rand=1980741615&compidx=aaaaa%3a0&comp=XX%3aKS50&ma=0&maval=9&lf=262144&lf2=0&lf3=0&height=635&width=1045&mocktick=1)
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Cheers,here's Samsung electric vs OMN.Samsung seems to have outperformed Omnia for a while up until recently.
P.E ratio of 7.5.
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Just for fun, here's the South Korea top50 and the JSE top 40 for the last 10 years, JSE is in black:
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=XX%3aTOPI&uf=0&type=64&size=4&sid=1181261&style=370&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=13&rand=1980741615&compidx=aaaaa%3a0&comp=XX%3aKS50&ma=0&maval=9&lf=262144&lf2=0&lf3=0&height=635&width=1045&mocktick=1)
Wonder if that is the exchange rate or the Emerging Market thing. Perhaps a chart of the 2 currencies will tell?
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Yes, sure doesn't look as good as one would think for investing in ZA if you are living in S. Korea.
10 yrs. ago you were looking at about 180 Won to 1 Rand.
Now ± 100 Won to 1 Rand. That is a 44½ % depreciation of the Rand vs. the Won.
(Can someone factor this into the chart ?)
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Yes, sure doesn't look as good as one would think for investing in ZA if you are living in S. Korea.
10 yrs. ago you were looking at about 180 Won to 1 Rand.
Now ± 100 Won to 1 Rand. That is a 44½ % depreciation of the Rand vs. the Won.
(Can someone factor this into the chart ?)
Oh man,just what I don't want to hear.but its true.This article would suggest Rand hedge investments.
I wonder if I should just send the money back to S.K and invest here.It would mean I lose money on the exchange rate but its already done.
This question may be abit off topic,but what would you guys do assuming there were no language barriers?Would you send your cash and invest overseas or are you currently doing so?
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Source = SBK Equities Research
Food Inflation falls to 4.2%y/y
Global deflation counters rand weakness to lower inflation to 5.5% y/y
Headline CPI in October slowed from 6.0% y/y to 5.5% y/y, largely due to food
and fuel. Food Inflation declined from 6.0 to 4.2%y/y and petrol declined from
12.8 to 9.3% y/y shaving 0.27ppts and 0.20ppts respectively off September's
6.0% y/y inflation rate. The decline in food inflation was led by unprocessed
food, which fell from 4.6 to 1.9% y/y. Processed food slowed more
moderately from 7.4 to 6.6% y/y. Excluding Food, NAB and petrol, CPI
remained flat at 5.4% y/y. We expect CPI to average 5.8% in 2013 and 5.6% in
2014.
There were some interesting developments within the components of CPI:
■ Vehicle prices are starting to show some recovery and contributed
0.05ppts more to CPI versus last month.
■ Alcoholic beverages contributed 0.04ppts more versus last month.
■ Countering these increases, electricity declined from 7.7 to 7.5%, books,
newspaper and stationary declined from 9.3 to 3.9%, and funeral (other)
services slowed from 5.9 to 2.8% y/y. Respectively these components
contributed 0.01, 0.03, 0.05, 0.04 less to CPI, reducing CPI by 0.08ppts
versus August.
■ Administrative price inflation ex petrol increased marginally from 7 to 7.1%
y/y. Administrative inflation has been well above CPI since January 2009.
Excluding administrative prices inflation dropped from 5.3% to 4.9% y/y, in
October, well within the target band.
■ The gap between durable and non-durable inflation is starting to close;
durable inflation rose from 1.3% to 1.9% y/y and non-durable inflation
slowed from 7.3% to 6.1% y/y. We think this is indicative of the
business cycle turning.
Looking ahead: Rand weakness vs. oil price:
While the rand should start to exert upward pressure on CPI in 2014, oil price
inflation in ZAR is moderating. We expect oil price inflation in USD terms to
remain contained over 2014 and ameliorate ZAR related inflationary effects.
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South Africa’s Economic Growth Slows to Four-Year Low of 0.7% (http://www.bloomberg.com/news/2013-11-26/south-africa-s-economic-growth-slows-to-four-year-low-of-0-7-.html)
Gross domestic product rose an annualized 0.7 percent compared with a revised 3.2 percent in the three months through June, Statistics South Africa said in a report released in Johannesburg today. The median estimate of 19 economists in a Bloomberg survey was 1 percent.
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South Africa’s Economic Growth Slows to Four-Year Low of 0.7% (http://www.bloomberg.com/news/2013-11-26/south-africa-s-economic-growth-slows-to-four-year-low-of-0-7-.html)
Gross domestic product rose an annualized 0.7 percent compared with a revised 3.2 percent in the three months through June, Statistics South Africa said in a report released in Johannesburg today. The median estimate of 19 economists in a Bloomberg survey was 1 percent.
:wtf: not far from a recession...
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South Africa’s Economic Growth Slows to Four-Year Low of 0.7% (http://www.bloomberg.com/news/2013-11-26/south-africa-s-economic-growth-slows-to-four-year-low-of-0-7-.html)
Gross domestic product rose an annualized 0.7 percent compared with a revised 3.2 percent in the three months through June, Statistics South Africa said in a report released in Johannesburg today. The median estimate of 19 economists in a Bloomberg survey was 1 percent.
:wtf: not far from a recession...
How possible is a recession in everyones opinion?I need some opinions.
Are you still investing or cashing in?
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Well since i'm still buying shares every month, a correction/crash just means more buying opportunities with better prices. It's the guys with big lump sums invested who aren't buying shares who feel the real pain.
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Well since i'm still buying shares every month, a correction/crash just means more buying opportunities with better prices. It's the guys with big lump sums invested who aren't buying shares who feel the real pain.
That is why it is very important to psych oneself into believing that 10% of your portfolio value is not actually there.
A correction is quite possible and a crash is highly unlikely in my view but that top 10% of my portfolio is the working part or buffer.
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I see this as opportunity. Surely when GDP turns upwards, companies you've bought now should produce better results pushing their share prices higher, not?
Difficult to understand when everybody's saying the market is expensive.
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South Africa’s Current-Account Deficit Widens to 6.8% of GDP (http://www.bloomberg.com/news/2013-12-03/south-africa-s-current-account-deficit-widens-to-6-8-of-gdp.html)
Including the BNLS countries in the trade data didn't help much at all. If excluded would have been 7.4% - Banana state !
South Africa’s current-account deficit widened to 6.8 percent of gross domestic product in the third quarter, the biggest gap in more than five years, as a weak rand boosted import costs while strikes and subdued global demand hurt exports.
The gap in the current account, the broadest measure of trade in goods and services, grew to an annualized 233 billion rand ($22.6 billion), the Reserve Bank said in its Quarterly Bulletin, released today in the capital, Pretoria. The median estimate of 11 economists surveyed by Bloomberg was for a deficit of 6 percent of GDP. The second-quarter shortfall was revised to 5.9 percent from 6.5 percent.
“If it were not for the revision in the previous quarter, the deficit would have been 7.4 percent,” Ilke van Zyl, an economist at Vunani Securities Ltd. in Johannesburg, said by phone. “We need ever-increasing financing to fund our external imbalances, which is a worry. It’s an ongoing symptom of the mismanagement of the country.”
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GDP 1st ¼ 2014 DOWN -0.6%
The seasonally adjusted real gross domestic product (GDP) at market prices for the first quarter of 2014 decreased by an annualised rate of 0,6 percent. The main contributors to this decrease in economic activity were the mining and quarrying industry (-1,3 percentage points) and the manufacturing industry (-0,7 of a percentage point).
The mining and quarrying industry’s contribution of -1,3 percentage points was based on a negative growth of 24,7 percent, due to lower production in the mining of gold, the mining of other metal ores (including platinum) and ‘other’ mining and quarrying (including diamonds).
The manufacturing industry’s negative contribution of 0,7 of a percentage point was based on a negative growth of 4,4 percent, mainly due to lower production in the petroleum, chemical products, rubber and plastic products division and the basic iron and steel, non-ferrous metal products, metal products and machinery division.
The biggest positive contributors in economic activity included finance, real estate and business services (0,4 of a percentage point), the wholesale, retail and motor trade; catering and accommodation industry (0,3 of a percentage point) and the transport, storage and communication industry and general government services (each contributing 0,2 of a percentage point).
The seasonally adjusted real annualised value added by the primary and secondary sectors recorded decreases of 17,2 percent and 2,7 percent respectively, while the tertiary sector recorded an increase of 1,8 percent during the first quarter of 2014.
The unadjusted real GDP at market prices for the first quarter of 2014 increased by 1,6 percent compared with the first quarter of 2013. The most notable performance was the construction industry that increased by 4,9 percent. Negative contributions were recorded by the mining and quarrying industry (negative growth of 2,5 percent) and the agriculture, forestry and fishing industry (negative growth of 1,6 percent).
The nominal GDP at market prices during the first quarter of 2014 was R874 billion, which is R2 billion less than in the fourth quarter of 2013.
(SRC= statssa)
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Rand falling 1% yesterday after this, the 'R'-word* whispered in corridors, case for interest rate hikes weakened.
* recession