Evan Pickworth

It was a tussle between resources and industrials in late morning trade on the JSE Friday, with resource counters winning the battle for now as heavyweights Anglo and BHP Billiton held sway. By 12.10pm on Friday, the all share index was up 0,63% with resources up a healthy 0,86% and banks gaining 1,50%.

First National Bank’s property strategist, John Loos, says that while the hike in South Africa’s repo rate to 8,5% is generally negative for property, it is not expected to be the cause of any property trend changes. Loos said that residential property had already started slowing a considerable time ago, and retail was set to start cooling as well, regardless of rate hikes.

A sell-off in resources stocks pushed the JSE into the red by 191 points by midday Wednesday, with players also seen adopting a cautious stance ahead of the key decision on interest rates due on Thursday. By 12.10pm, the all-share index was down 0,84%, with gold off by 2,58% and resources by 1,55%.

The JSE lost a little ground in range-bound trade by midday, with traders becoming a little more hesitant to dive in ahead of the Monetary Policy Committee (MPC) meeting this week. By 12.24pm, the all share index was up 0,17%, with platinum leading the way with a gain of 0,77% and industrials adding 0,21%.

South African Minister of Finance Trevor Manuel said on Thursday evening that the modern world offered many opportunities for public finance innovation and for new kinds of partnership with the private sector and across national boundaries, but that getting it right meant keeping it simple.

South African Reserve Bank Governor Tito Mboweni sounded a warning on inflation on Thursday morning as there were, as far as he could see, no indications of any meaningful change in consumer behaviour and said there were still significant upside risks to the inflation outlook.

The JSE was mixed by midday on Wednesday, with the resources index 341 points in the red, but some buying interest was starting to stir in industrials, retailers and banks, as well as gold. By 12.27pm, the all-share index was up 0,12%, or 28 points, with financials and industrials still leading the way as they moved up 0,84% and 0,82% respectively.

South African Reserve Bank Governor Tito Mboweni on Tuesday evening flagged as important the upward bias in place in consumer price index inflation to 5% in August 2006 and said that while inflation had remained within the target band in recent months, price pressures had started mounting due to increases in oil, food, sustained consumer demand and the depreciation in the rand.

The JSE was mixed and moving sideways by midday on Monday, although traders were keeping a firm eye on resources counters, the rand, gold and the oil price for another potential push firmer. By 11.49am, the all-share index was up 0,32%, with resources leading the way. The resources index set the pace with a 1,10% gain, the gold index was 1,32% firmer while platinum was up by 1,34%.

After posting gains of 1% on Thursday and ending on a fresh closing high of 22 491 points, the resources sector continued to weave its magic for the market by midday on Friday as the 22 612 level was struck. The JSE’s all share index has now surpassed the previous record trading high of 22 549,01 set on September 5.

South African Reserve Bank (SARB) governor Tito Mboweni said on Thursday that the three things on his mind at the moment were strong consumer demand, the weakening current account deficit and whether the SARB was moving with the curve of interest-rates globally, was behind the curve, or ahead of it.

First National Bank’s property economist John Loos says there is a potential indirect impact to come in the local housing market from the property slowdown in the United States. Loos says that from 1999, the local housing boom was driven by the combination of a massive reduction in local interest rates along with accelerating economic growth.

South African Minister of Finance Trevor Manuel said on Thursday that while he was made newsmaker of the year on Wednesday night, it was the economy in the past year that was actually newsmaker of the year. However, he added that there are still many things that need to be done, with education one of the biggest challenges going forward.

South African Reserve Bank (SARB) Governor Tito Mboweni said on Thursday that while he thought South Africa’s interest rates were too high, the sociology of the previous lower rate environment meant he had to raise rates to control inflation. He said the combination of household debt, loans and advances to the private sector and house-price growth meant that South Africa was beginning to have an unbalanced economy.

South Africa has slipped one place in the World Bank and International Finance Corporation’s <i>Doing Business 2007</i> report to 29th overall from 28th last year, with co-author of the report, Caralee McLiesh, saying one of the key areas for reform needed in South Africa is the complex tax system. "There are not level taxes and there is a lot of administration involved in the tax system."

While South Africa ranks as the top country in Africa for ease of doing business, it is nowhere to be found as far as the pace of reform goes in Wednesday’s World Bank-International Finance Corporation report. Reforms would have simplified business regulations, strengthened property rights, eased tax burdens, increased access to credit, and reduced the cost of exporting and importing.

A new report by the World Bank and the International Finance Corporation has found that doing business in Africa has become easier thanks to an increase in the pace of reform to encourage business, jobs, and growth and for the first time Africa has made it into the top three among reforming regions.

Mvelaphanda Group has advised shareholders that headline earnings per ordinary share for the year ended June 30 2006 are expected to be up approximately 125% to between 315 cents per ordinary share and 325 cents per ordinary share from the previous comparable period.

South Africa’s worse-than-expected consumer inflation data released shortly after the Reserve Bank released equally bad private sector credit extension data on Wednesday has increased expectations of more rate hikes. Inflation has been rising over the second and third quarters of 2006, a development which has prompted the Reserve Bank to become far more hawkish regarding interest rate policy.

The increase in South Africa’s producer price index (PPI) is expected to have risen to 7,5% year-on-year in July, unchanged from the surprise 7,5% increase in June, a survey of 12 economists by I-Net Bridge has found. Forecasts ranged from 7% y/y to 9,3% y/y, although only four of the 12 economists surveyed expected the increase to be above 7,5%.

The JSE edged into the black by 73 points just after midday on Thursday after being down in early trade as traders began to eye value at the lower levels. This small fillip came after profit-taking on mining heavyweights Anglo and BHP Billiton saw the JSE end in the red by 333 points on Wednesday after two days of strong gains.

Fitch Ratings’ director of the sovereigns department, Veronica Kalema, says South Africa’s net exports will get a boost from the weaker rand, which will have a rebalancing effect on the economy. Fitch also said South Africa’s gross domestic product should not fall as low the 3,7% reached in 2004.

The JSE lost 118 points by midday with resources leading the pack downhill, although some support was seen coming for bank and retail counters. By 12.07pm, the all-share index was down 0,55%, with banks the only shining light, up marginally by 0,07%. Financials were down 0,20% while resources lost 0,92%.

The JSE pared its early gains to just a six point increase by midday on Wednesday as traders awaited key United States inflation data and as the market absorbed a weaker FTSE market. Gold shares, however, continued to lead the pack. By 11.52am, the all-share index was up a mere 0,03% after being up 0,40% in early trade.

The Congress of South African Trade Unions-affiliated Southern African Clothing and Textile Workers’ Union (Sactwu) says it is optimistic that the one outstanding wage negotiation should be settled in the next two weeks. "We are optimistic that the one outstanding negotiation should be resolved in the next two weeks," said Sactwu’s national organising secretary Wayne van der Rheede.

Global resources giant Anglo American has reported record underlying earnings of $2,5-billion in the half year to 30 June 2006, an increase of 47% over the previous period. The company said the high earnings were achieved against a backdrop of a favourable trading environment with strong metal prices and improved volumes.