Watch these economic variables as they exert a big influence on your shares.
Share prices are sensitive things, reacting to news from far-flung places. Think for example, about how political developments in oil-rich Iran work wonders on Sasol's share price, and how the same news sends shudders down the spines of MTN investors (as MTN is rolling out a network in Iran, which needs to be ready by August).
A company's value, return and share price reflects the perception of its earnings and profit flow. If any news is perceived to affect a company's future profits adversely, its share price falls. Remember how Sasol's share price took a knock on Budget day (February 15) this year, when Finance Minister Trevor Manuel said government was considering levying a tax on the company's windfall profits? In the space of an afternoon, millions were wiped of Sasol's market cap as investors hurried to offload their shares for fear that profits may be affected.
An important component of the constant flow of information that can influence share prices is the change in economic variables both in South Africa and the world's biggest economy, the USA.
Read the full article at MoneyWeb.co.za
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