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JSE slumps on investor fears
June 2, 2011--The JSE sank on Thursday on the back of a combination of the strong rand, downbeat US economic data and resurfacing worries over the European sovereign debt crisis. Resources and gold counters slid more than 2%, thanks in part to the robust rand and a slight pullback in commodity prices.
The local currency, which rose against the pound and the dollar, hit dual-listed stocks and mining companies particularly hard, said Kevin Algeo, portfolio manager at Imara SP Reid.
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Source: FIN24
Bonds mostly firmer on rand
June 2, 2011--South African bonds were mostly firmer in late trade on Thursday, tracking the strong local currency. The longer dated R186s were a touch weaker on some selling earlier in the day.
By 15:50, the benchmark R157 bond was trading at 7.395% from its previous close of 7.425%. The R207 was bid at 8.145% and offered at 8.225% from 8.155% and the R186 was trading at 8.360% and offered at 8.435% from 8.355%.
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Source: FIN24
Bonds buoyed by short covering
June 1, 2011--South African bonds were up to 15 basis points firmer in late trade on Wednesday, on the back of a bout of short covering.
Short covering activity is positive for prices, as it means short sellers have to purchase securities to close out short sales.
By 15:50, the benchmark R157 bond was trading at 7.425% from its previous close of 7.530%. The R207 was bid at 8.160% and offered at 8.140% from 8.275% and the R186 was traded at 8.350% and offered at 8.340% from 8.505%.
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Source: FIN24
Weaker JSE mirrors global trend
June 1, 2011--The JSE ended broadly lower on Wednesday, in synch with its global counterparts, with volumes remaining light on a day when the US released disappointing data.
By 17:00 local time, the JSE All Share [JSE:J203] index was down 0.75%, with gold miners declining 0.52%, resources easing 1.16% and platinum miners falling 0.21%. Banks also shed 1.05%, financials gave up 0.85% and industrials were down 0.34%.
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Source: FIN24
Upbeat Greek news shores up JSE
May 31, 2011--The JSE stayed firmly in positive territory at noon on Tuesday as upbeat news on Greece helped bolster investor sentiments worldwide.
The market is eagerly awaiting the Competition Tribunal's decision over the Massmart Holdings [JSE:MSM] and Walmart deal, according to an equity derivatives trader, who also stated that the reweighting of the MSCI Index was likely to affect local shares such as Murray & Roberts, Barloworld [JSE:BAW] and Life Healthcare Group Holdings [JSE:LHC].
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Source: FIN24
Rand warms to Walmart deal approval
May 31, 2011--The rand has extended gains against the dollar on Tuesday, after competition authorities approved the Walmart/Massmart deal with conditions.
The rand firmed to R6.8548 against the dollar at 12:27 GMT, from R6.8720 before news that Walmart's $2.4bn bid for Massmart Holdings [JSE:MSM] could go ahead.
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Source: FIN24
Bonds remain flat despite a busy day
May 31, 2011--South African bonds remained relatively flat in late trade on Tuesday, despite the release of better than expected key economic data.
By 16:00, the benchmark R157 bond was trading at 7.520% from its previous close of 7.465%. The R207 was bid at 8.270% and offered at 8.240% from 8.210% and the R186 was trading at 8.470% and offered at 8.485% from 8.460%.
The rand was bid at 6.8351 against the dollar from 6.9238 late on Thursday.
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Source: FIN24
SA notches up 4.8% growth
May 31, 2011-- South Africa’s economy grew by 4.8% in the first quarter of 2011 on a seasonally adjusted and annualised basis, compared with a revised 4.5% expansion in the fourth quarter of 2010, data showed on Tuesday.
On an unadjusted year-on-year (y/y) basis, the economy expanded by 3.6% from 3.8% in the fourth quarter.
A Reuters poll of 20 economists last week forecast economic growth slowing to 4.2% in the first quarter and 3.6% on a y/y unadjusted basis
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Source: FIN24
African private equity deal-making soars: $1.8bn transactions by May
May 30, 2011--Private equity funds focusing on Africa are becoming more active and making more deals. At least 12 deals were closed in the first five months to May 2011, compared to 19 deals in the whole of 2010, reports leading website Private Equity Africa which cites data from the research house Preqin.
The disclosed total value of the investments was $1.8 billion, compared to $600 million of deals made in the whole of 2010. Private Equity Africa reports that at least 5 more investments are set to be closed by June this year, according to its sources.
The peak was in 2007, when investors closed $7 billion across 34 deals, according to Preqin data. Current levels of aggregate deal making values are similar to those seen in 2008. Then came the global financial crisis and both deals values and volumes have slumped. 2010 saw the lowest number of deals since 2006.
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Source: African Capital Markets
Why African investors use Depositary Receipts?
May 30, 2011--Many foreign investors have investments in Africa but hold them in international custody in London or New York and perhaps wish to trade them on international securities markets such as London Stock Exchange or New York’s NYSE Euronext. They would choose to hold their equities in the form of Depositary Receipts, usually known as “American” (ADRs) if issued in the US, “Global” (GDRs) in London and there are DRs in several other countries including South Africa (SADRs).
The idea is that shares listed on an international exchange are transferred to a strong financial institution, who then issues a DR security which can be more easily traded on an international exchange or over-the-counter (OTC) market. BNY Mellon dominates the field but other issuers include JP Morgan Chase, Citi and Deutsche Bank. The total value of DRs traded in 2010 worldwide was $3.5 trillion, up 30% on 2009, and 89% of this trading was in the US.
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Source: Afican Capital Markets
