Gold was little changed on Thursday, with sentiment remaining bullish after it surged more than 3 percent to a nine-month high as strong energy prices and geopolitical tensions induced heavy fund buying.
Traders were eager to test the metal's upside after Wednesday's rally, with demand rising for gold exchange-traded funds (ETF) and investors keen to diversify into gold and other commodities as U.S. equity prices were holding near record highs.
Gold's allure as a tool to hedge against inflation also rose after a surprisingly big pick-up in core U.S. consumer prices in January.
Read more at Reuters South Africa
Wednesday, February 21, 2007
Master Your Trading Mindtraps
The popularization of speculative trading activity in the financial markets, partly due to the development of retail trading solutions offered on the internet, has created a new population of traders in the market. Most of these traders are non-professionals that are attracted by the potential to generate revenue quickly.
Read more at investopedia.com
Read more at investopedia.com
Inflation 'still in check'
The inflation rate targeted by South Africa's central bank quickened in January, official data showed on Wednesday, keeping open the possibility of another rate hike.
Statistics South Africa said the CPIX inflation rate rose by 5.3% in the year to January, slightly above forecasts of 5.2%, after 5.0% in December.
The Reserve Bank kept its key repo rate steady at 9% last week after 200 basis points worth of hikes last year, saying the inflation outlook had improved.
Read more at FIN24.co.za
Statistics South Africa said the CPIX inflation rate rose by 5.3% in the year to January, slightly above forecasts of 5.2%, after 5.0% in December.
The Reserve Bank kept its key repo rate steady at 9% last week after 200 basis points worth of hikes last year, saying the inflation outlook had improved.
Read more at FIN24.co.za
Manuel optimistic about growth
Finance minister Trevor Manuel is a whole lot more optimistic about economic growth than economists in the private sector.
He is predicting a growth rate of 4.8% in 2007 - compared with forecasts of 4.4% in the private sector.
Manuel also revealed what most economists have predicted - that gross domestic product (GDP) grew by 4.9% last year. The final figures will only be available next week, when Statistics SA releases the GDP figures for the last quarter of the year.
The Budget Review said that continued strong investment and improved net trade would support growth in 2007. As the international environment improved and the supply capacity of the economy expanded, domestic growth was expected to accelerate to 5.4% in 2009.
Read more at FIN24.co.za
He is predicting a growth rate of 4.8% in 2007 - compared with forecasts of 4.4% in the private sector.
Manuel also revealed what most economists have predicted - that gross domestic product (GDP) grew by 4.9% last year. The final figures will only be available next week, when Statistics SA releases the GDP figures for the last quarter of the year.
The Budget Review said that continued strong investment and improved net trade would support growth in 2007. As the international environment improved and the supply capacity of the economy expanded, domestic growth was expected to accelerate to 5.4% in 2009.
Read more at FIN24.co.za
Telkom loses $130m IT fight
Fixed-line phone operator Telkom has lost a bid to overturn a ruling against it in a $130m dispute with US software and IT firm Telcordia, Telkom said on Wednesday.
Telkom said in a statement it expected to start arbitration with Telcordia Technologies in September to determine how much it would have to pay in compensation.
Telcordia is seeking $130m in damages in the dispute over a cancelled contract, Telkom said in November, arguing a fairer price was around $50m.
Read more at FIN24.co.za
Telkom said in a statement it expected to start arbitration with Telcordia Technologies in September to determine how much it would have to pay in compensation.
Telcordia is seeking $130m in damages in the dispute over a cancelled contract, Telkom said in November, arguing a fairer price was around $50m.
Read more at FIN24.co.za
Sinners coughing up
It's enough to make a ou give up smoking. And drinking.
Well, maybe not drinking. But when you go to the pub now, you're going to have to bleddy walk, because he's bleddy put up the price of petrol as well.
Finance Minister Trevor Manuel on Wednesday announced the customary increases in sin taxes - the government's cut on cigarettes and booze - and a hike in both the fuel and Road Accident Fund levies.
Read more from FIN24.co.za
Well, maybe not drinking. But when you go to the pub now, you're going to have to bleddy walk, because he's bleddy put up the price of petrol as well.
Finance Minister Trevor Manuel on Wednesday announced the customary increases in sin taxes - the government's cut on cigarettes and booze - and a hike in both the fuel and Road Accident Fund levies.
Read more from FIN24.co.za
Retirement nest set to grow
People saving for retirement would see their nest eggs significantly enhanced when the retirement fund levy was abolished next month, the Life Offices' Association said on Wednesday.
Significant strides had been made in reforming the South African retirement savings environment in the past year, said its chief executive Gerhard Joubert.
Read more at FIN24.co.za
Significant strides had been made in reforming the South African retirement savings environment in the past year, said its chief executive Gerhard Joubert.
Read more at FIN24.co.za
Govt passes economy test
About two-thirds of South African adults (66%) agree that the government is managing the economy very or fairly well, while just more than half (54%) think that the government's performance in controlling inflation was managed very or fairly well.
These are among the findings of the Government Performance Barometer, a biannual study conducted by Markinor. A total of 3 500 respondents, representative of the adult population in South Africa, were interviewed in November last year.
Read more at FIN24.co.za
These are among the findings of the Government Performance Barometer, a biannual study conducted by Markinor. A total of 3 500 respondents, representative of the adult population in South Africa, were interviewed in November last year.
Read more at FIN24.co.za
Zim bakeries halt production
Shops in Zimbabwe were running out of bread on Wednesday after most bakeries halted production, claiming government price controls and escalating production costs had made their businesses unviable.
Bread shelves in major supermarkets across Harare were empty while others had only a few loaves. A few stores did have scones, rolls and buns on sale as the government does not set their prices.
Read more at FIN24.co.za
Bread shelves in major supermarkets across Harare were empty while others had only a few loaves. A few stores did have scones, rolls and buns on sale as the government does not set their prices.
Read more at FIN24.co.za
Power alert for SA
Eskom on Wednesday warned that it is experiencing a higher than expected demand for electricity which can largely be ascribed to the current heatwave.
In addition there has also been a number of unplanned outages of generating units, Eskom said in a statement.
Read more at FIN24.co.za
In addition there has also been a number of unplanned outages of generating units, Eskom said in a statement.
Read more at FIN24.co.za
Steinhoff to buy rest of Unitrans
Transport and logistics group Unitrans said on Wednesday it would dispose of its entire business to a subsidiary of furniture manufacturer Steinhoff, sending its shares lower.
Unitrans said minority shareholders would receive two Steinhoff shares for each Unitrans share held. Steinhoff already owns 60.76% of Unitrans.
Read more at FIN24.co.za
Unitrans said minority shareholders would receive two Steinhoff shares for each Unitrans share held. Steinhoff already owns 60.76% of Unitrans.
Read more at FIN24.co.za
FirstRand sees earnings up 28%
Financial services group FirstRand expected first-half basic and diluted headline earnings per share to increase by as much as 28%, the group said on Wednesday.
Read more at FIN24.co.za
Read more at FIN24.co.za
Truworths cancels 7.5% of shares
Fashion retailer Truworths has cancelled 7.47% of its shares in issue and applied to delist them, it said on Wednesday.
Truworths said it had decided to cancel the shares, which were owned by a subsidiary company, to restructure its balance sheet and enable it to continue its treasury share buyback programme.
Read more at FIN24.co.za
Truworths said it had decided to cancel the shares, which were owned by a subsidiary company, to restructure its balance sheet and enable it to continue its treasury share buyback programme.
Read more at FIN24.co.za
Absa Economic Research
Comments on current economic issues
21 February
Chart of the Week (60KB)
According to the World Economic Forum’s Global Competitiveness report for 2006-07, the most competitive economies are those of Switzerland, Finland and Sweden. The USA which was ranked 1st in 2005, experienced the biggest drop, falling to 6th place in 2006. ... more
21 February
Chart of the Week (60KB)
According to the World Economic Forum’s Global Competitiveness report for 2006-07, the most competitive economies are those of Switzerland, Finland and Sweden. The USA which was ranked 1st in 2005, experienced the biggest drop, falling to 6th place in 2006. ... more
U.K. Stocks Pay Europe's Highest Dividends, Fail to Lure Buyers
Stock investors who hunt for high yields in Europe are looking everywhere except the U.K., where companies pay the biggest dividends in the world's major markets.
Britain's FTSE 100 Index is lagging behind the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, for a third year. The pound's 13 percent rally against the dollar in the past 12 months and rising interest rates are weighing on earnings and share prices.
The slowdown in profit growth is enough to deter money managers even though FTSE 100 companies' dividend payments relative to share prices are 16 percent higher than those in the 13 countries sharing the euro, according to data compiled by Bloomberg. Dividends for the FTSE 100 are two-thirds more than those of the Dow Jones Industrial Average in the U.S. and are almost quadruple those of Japan's Nikkei-225 Stock Average
Read more at Bloomberg.com
Britain's FTSE 100 Index is lagging behind the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, for a third year. The pound's 13 percent rally against the dollar in the past 12 months and rising interest rates are weighing on earnings and share prices.
The slowdown in profit growth is enough to deter money managers even though FTSE 100 companies' dividend payments relative to share prices are 16 percent higher than those in the 13 countries sharing the euro, according to data compiled by Bloomberg. Dividends for the FTSE 100 are two-thirds more than those of the Dow Jones Industrial Average in the U.S. and are almost quadruple those of Japan's Nikkei-225 Stock Average
Read more at Bloomberg.com
S. Africa's Manuel to Propose Compulsory Pension Plan
South African Finance Minister Trevor Manuel may forecast the country's first budget surplus since at least 1960 tomorrow and propose a compulsory pension and medical plan to increase savings by individuals.
In his 11th budget, Manuel probably will revise his forecast for a deficit of 0.4 percent of gross domestic product in the year that ends March 31 after a tax windfall, said Arthur Kamp, an economist at Sanlam Investment Management. The finance minister starts his speech to parliament in Cape Town at 2 p.m.
A consumer spending boom, higher gold and platinum prices and a weaker rand have driven up profits in Africa's biggest economy. Now the government is seeking to increase savings and finance the investment needed to lift economic growth further.
Read more at Bloomberg.com
In his 11th budget, Manuel probably will revise his forecast for a deficit of 0.4 percent of gross domestic product in the year that ends March 31 after a tax windfall, said Arthur Kamp, an economist at Sanlam Investment Management. The finance minister starts his speech to parliament in Cape Town at 2 p.m.
A consumer spending boom, higher gold and platinum prices and a weaker rand have driven up profits in Africa's biggest economy. Now the government is seeking to increase savings and finance the investment needed to lift economic growth further.
Read more at Bloomberg.com
Corn Farms Replace New York Lofts as Hottest Property
Farmland from Iowa to Argentina is rising faster in price than apartments in Manhattan and London for the first time in 30 years.
Demand for corn used in ethanol increased the value of crop land 16 percent in Indiana and 35 percent in Idaho in 2006, government figures show. The price of a Soho loft appreciated only 12 percent, while a pied-a-terre in Islington near London's financial district gained 11 percent, according to realtors.
Farmland returns will take a quantum leap over the next 18 months,'' after corn prices surged to a 10-year high in February, said Murray Wise, the 58-year-old chairman and chief executive officer of Westchester Group Inc. in Champaign, Illinois, who oversees $460 million of land investments
Read more at Bloomberg.com
Demand for corn used in ethanol increased the value of crop land 16 percent in Indiana and 35 percent in Idaho in 2006, government figures show. The price of a Soho loft appreciated only 12 percent, while a pied-a-terre in Islington near London's financial district gained 11 percent, according to realtors.
Farmland returns will take a quantum leap over the next 18 months,'' after corn prices surged to a 10-year high in February, said Murray Wise, the 58-year-old chairman and chief executive officer of Westchester Group Inc. in Champaign, Illinois, who oversees $460 million of land investments
Read more at Bloomberg.com
Evraz wins EU conditional OK to buy Highveld
Evraz Group, Russia's top steel maker by volume, won a conditional approval from the European Commission on Tuesday to buy South African steelmaker Highveld for $678 million.
The Commission said that, given the commitments made by Evraz, "the Commission has concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area".
Highveld, South Africa's second-largest steel maker, is the world's top supplier of vanadium, used in the production of special and alloy steels. The company is being sold by Anglo American Plc.
Read more at Reuters South Africa
The Commission said that, given the commitments made by Evraz, "the Commission has concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area".
Highveld, South Africa's second-largest steel maker, is the world's top supplier of vanadium, used in the production of special and alloy steels. The company is being sold by Anglo American Plc.
Read more at Reuters South Africa
R331m at the age of 33
Just one of many interesting deals over R5m by the directors of JSE companies.
Last October, at the tender age of 33, Philippa Johnson of Cape Town received R331m in cash for a tranche of shares in Atlas Properties.
This was just one of many eyebrow-raising deals over R5m by the directors of JSE companies in the past six months.
Atlas CEO Ian Raubenheimer explains that the young Johnson received that wad of cash on behalf of a family trust, which sold some 31% of Atlas to Acucap. Johnson was a non-executive director of Atlas at the time of the sale, so it was recorded in her name. Her father, Peter Irvine, one of the founders of Atlas, died in 2005.
The shares were part of his estate and the huge pile of money accrued to Johnson, her mother and three sisters.
JJM van Zyl, a cousin of the Irvine's, is listed as the seller of another R70m of Atlas shares, apparently to Growthpoint.
Another mega-deal last July was the R371m sale of Steinhoff shares by directors Bruno Steinhoff, Markus Jooste, Hendrik Ferreira and Johannes Neethling.
Read more at MoneyWeb.co.za
Last October, at the tender age of 33, Philippa Johnson of Cape Town received R331m in cash for a tranche of shares in Atlas Properties.
This was just one of many eyebrow-raising deals over R5m by the directors of JSE companies in the past six months.
Atlas CEO Ian Raubenheimer explains that the young Johnson received that wad of cash on behalf of a family trust, which sold some 31% of Atlas to Acucap. Johnson was a non-executive director of Atlas at the time of the sale, so it was recorded in her name. Her father, Peter Irvine, one of the founders of Atlas, died in 2005.
The shares were part of his estate and the huge pile of money accrued to Johnson, her mother and three sisters.
JJM van Zyl, a cousin of the Irvine's, is listed as the seller of another R70m of Atlas shares, apparently to Growthpoint.
Another mega-deal last July was the R371m sale of Steinhoff shares by directors Bruno Steinhoff, Markus Jooste, Hendrik Ferreira and Johannes Neethling.
Read more at MoneyWeb.co.za
Is it a good time to invest in a second property?
Investors who want a substantial share of the investment property market should focus on the lower end of the sector.
Experts agree that properties above R1,5m offer little capital growth and extremely low yields, while properties below R500 000 hold the best value.
"The growth opportunities at the lower end of the market are huge," reckoned Allister Long, MD of property services consultancy, Powerhouse.
Demand for housing is outweighing supply and this will keep the market exceptionally buoyant, he explained.
Read more at MoneyWeb.co.za
Experts agree that properties above R1,5m offer little capital growth and extremely low yields, while properties below R500 000 hold the best value.
"The growth opportunities at the lower end of the market are huge," reckoned Allister Long, MD of property services consultancy, Powerhouse.
Demand for housing is outweighing supply and this will keep the market exceptionally buoyant, he explained.
Read more at MoneyWeb.co.za
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