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 Issue: 25 January 2011 20:00

Global economy

Inflation and interest rates


Consumer prices in the UK are running ahead of the upper 3% limit at 3,7%.

At the same time the economy is in poor shape. The consensus for Q4 GDP numbers was a GDP gain of 0,5%. But the number came out at a decline of 0,5%, which is the first decline since the 3rd quarter of 2009.


The ECB is looking for a maximum of 2% inflation over the medium term – inflation is currently running at 2,2%.

The ECB is more “hawkish” on inflation – i.e. it has a long history of trying to supress inflation through the use of higher interest rates. In some respects this history goes back to the hyperinflation experienced in the Weimar Republic of Germany between 1921 and 1923.

Nevertheless, given the very weak economy, the ECB is not likely to start increasing interest rates in 2011.

The US

The US targets core PCE (personal consumption expenditure), instead of headline consumer price inflation. Because this core PCE excludes food and energy components, it places the US Federal Reserve on a current good wicket, as all the price pressure is coming from
these 2 main sources.

The US Federal Reserve is likely to hold interest rates at on-going low levels for now, with core inflation running at around 1%.

The US Federal Reserve is meeting today and tomorrow. It is unlikely that there will be any material change in their outlook and interest rate policy.

Growth forecasts

The IMF released its World economic Report today, with an increase in its global GDP forecast in 2011 to 4,4% from a previous estimate of 4,2%.
Across some of the major economies it has:

• US growing at 3%
• Eurozone at 1,5%
• Japan at 1,6%.
• China at 9,6%

Chinese Reserves

In the 4th quarter of 2010, Chinese foreign reserves rose by USD 200 billion. Over the years, these reserves have moved up dramatically, which, because they are not effectively sterilised through the exchange rate (which is the major bone of contention for the US government), they have the effect of inflating Chinese liquidity.

Chinese authorities appear to be very blunt about the fact that they will let their currency, the renminbi, appreciate only nominally against the dollar, as they accumulate foreign reserves, thus sustaining their high exports.

With on-going massive net exports to the world, especially to the US and Europe, foreign currencies pour into the country. The Chinese central bank then prints renminbi in order to buy these foreign currencies, accumulating foreign reserves, but boosting local money supply.

This money supply boost continues to fuel inflation in China.

Chinese foreign exchange reserves are reflected in the table below

Food and energy prices
Surging food and other commodity prices are coming off the back of excess global liquidity – not necessarily as a function of demand from a still sluggish global economy.

Source: Ecowin

For the time being, despite growing concerns about rising inflation, monetary authorities in general will continue to remain accommodative. This will continue to fuel liquidity, which is positive for risk assets such as equities and commodities.


Ian de Lange
021 9144 966

Tue, 25 Jan 2011

International ratings agency Standard and Poor's upgraded South Africa's outlook to stable from negative on Tuesday but warned that increasing public debt levels could reduce budget flexibility.  Full story
South African truckers seeking 20 percent wage increases over two years are threatening a strike that could slam the brakes on Africa's largest economy, a union official said on Tuesday.  Full story
Heavy rains in South Africa have so far cost the country's farming sector over 2 billion rand ($284 million) in damages, an industry official said on Tuesday.  Full story
Mozambique's Ports Development Company (MPDC) said on Tuesday it would increase the handling capacity of its Maputo port to 12 million tonnes this year from 8.7 million in 2010 to take more coal from South Africa.  Full story

17h46 South Africa's power utility Eskom is managing its problems with wet coal for now, but power supply remains tight, a senior. . .  Full story
16h15 South African farmers have planted less maize this season than last year partly due to lower prices, and wheat output is. . .  Full story
15h42 South African logistics group Transnet said on Tuesday it would reopen a coal export line leading to the Richards Bay coal. . .  Full story
12h23 South Africa exported 10,690 tonnes of white maize last week compared with 9,315 tonnes in the previous week, the South African. . .  Full story

Trading Statistics


Major Moves Up
SharenameSaleMove% MoveVolume
1 RANGOLD  298186.43.%14391
2 AMA  210105.00.%1003006
3 DIGICOR  315155.00.%6015
4 URONE  42681924.71.%23247
5 PETMIN  301113.79.%253282
6 AMECOR  15553.33.%45000
7 RICHEMONT  40061293.33.%16695341
8 ARB  313103.30.%9327
9 IPS  13043.17.%400
10 RAINBOW  1698472.85.%10
11 CASHBIL  92502492.77.%16973
12 PNR-FOODS  57841542.74.%93547
13 CADIZ  35092.64.%5467
14 TRNSHEX  23962.58.%248034
15 MMG  20452.51.%52873
16 VERIMARK  16442.50.%28150
17 ELLIES   21552.38.%712422
18 JASCO  13832.22.%401743
19 VILLAGE  23552.17.%100
20 WINHOLD  16331.88.%39800

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Major Moves Down
SharenameSaleMove% MoveVolume
1 GRANPRADE  281-19-6.33.%24652
2 BAUBA  212-14-6.19.%3250
3 ONELOGIX  140-8-5.41.%87333
4 JUBILEE  365-18-4.70.%34290
5 EASTPLATS  1190-54-4.34.%58710
6 ASSORE  20000-900-4.31.%21076
7 CITYLDG  7060-315-4.27.%565440
8 KAP  230-10-4.17.%1724800
9 LITHA  240-10-4.00.%2443533
10 AQUARIUS  3880-150-3.72.%23633
11 SENTULA  270-10-3.57.%370017
12 EQSTRA  705-25-3.42.%41318
13 KELLY  430-15-3.37.%10000
14 GFIELDS  11141-379-3.29.%3568528
15 HARMONY  7500-240-3.10.%1710537
16 AFEAGLE  175-5-2.78.%600
17 DRDGOLD  323-9-2.71.%173381
18 GBGOLD  1725-48-2.71.%1860
19 ADCORP  2701-74-2.67.%177972
20 ARGENT  920-25-2.65.%50507

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New Highs
SharenameSaleHighMove% MoveVolume
1 URONE  426842681924.71.%23247
2 ITLTILE  42342320.48.%35800
3 OPTIMUM  32503300100.31.%187255
4 ASSORE  2000020940-900-4.31.%21076

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New Lows
SharenameSaleLowMove% MoveVolume
1 MVELARES  37893765-51-1.33.%272080
2 CLOVER  10551050-10-0.94.%381583
3 ACUCAP  32503001-20-0.61.%261505

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Spot Prices
NameTimeRPMove% Move
JSE Overall17:0031656.63-212.43-0.67%
JSE Top 4017:0028334.12-210.89-0.74%
JSE Gold17:002501.91-69.13-2.69%
JSE Financial17:0021508.41-85.99-0.40%
JSE Industrial17:0031524.45-70.06-0.22%
JSE Indust 2517:0026145.72-55.05-0.21%
JSE Resource17:0055921.56-702.41-1.24%
DJ Futures19:5011900.00-30.00-0.25%
DJ Ind18:4511918.88-61.64-0.51%
SP 50019:461287.23-3.61-0.28%
FTSE 10018:355917.71-26.14-0.44%
All Ords07:384909.0020.900.43%
NZSE 5006:323359.076.410.19%
NameTimeRPMove% Move
Gold/R kg19:5630341212560.42%
Brent Crude19:5694.83-2.00-2.07%
Rand / Dollar19:587.06880.07881.13%
Rand / Pound19:5511.1445-0.0105-0.09%
Rand / Euro19:559.64490.09450.99%
Rand / NZD19:575.41480.07971.49%
Rand / AUD19:557.02930.04480.64%
Yen / Dollar19:5782.3600-0.1800-0.22%
Euro / Dollar19:550.7327-0.0002-0.03%
Dollar / Euro19:571.36420.00010.01%
Pound / Dollar19:550.63230.00671.07%

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Index Summary
Index NameRPMove% Move
Top 4028,334.12-210.89-0.74%
Mid Cap42,075.66-85.26-0.20%
Small Cap32,709.02-209.79-0.64%
Resource 2055,921.56-702.41-1.24%
Industrial 2526,145.72-55.05-0.21%
Financial 158,145.27-34.56-0.42%
Financial & Ind. 3029,537.32-89.02-0.30%
All Share31,656.63-212.43-0.67%
Oil & Gas 27,057.59-177.74-0.65%
Mining 36,745.88-493.94-1.33%
Gold Mining2,501.91-69.13-2.69%
Platinum Mining80.20-1.66-2.03%
Oil & Gas Producers 14,548.37-95.56-0.65%
Basic Materials 30,915.70-389.41-1.24%
Chemicals 13,532.03-19.33-0.14%
Forestry & Paper 12,975.8259.840.46%
Industrial Metals 29,398.72-266.64-0.90%
Industrials 29,482.53-20.53-0.07%
General Industrials 77,071.83-83.82-0.11%
Consumer Goods 25,747.6467.050.26%
Automobiles & Parts 2,819.2511.320.40%
Household Goods145.34-2-1.21%
Health Care 32,144.77-225.91-0.70%
Beverages 79,166.04-1257.52-1.56%
Food Producers 48,255.87-129.22-0.27%
Index NameRPMove% Move
Personal Goods 400.1012.883.33%
Consumer Services 51,551.97-247.74-0.48%
General Retailers 39,022.6922.110.06%
Travel & Leisure 4,068.23-29.73-0.73%
Media 83,323.77-1395.30-1.65%
Support Services 2,588.39-20.19-0.77%
Telecommunications 62,172.27-493.01-0.79%
Financials 21,508.41-85.99-0.40%
Banks 40,662.36-35.23-0.09%
Non-life Insurance 30,253.17-543.18-1.76%
Life Insurance 15,608.85-87.09-0.55%
General Financial 2,337.83-22.41-0.95%
Technology 20,536.01-154.79-0.75%
SHARIAH TOP40 3,175.80-37-1.14%
FTSE/JSE SHARIAH ALL3,243.79-35-1.06%
COAL MINING20,740.23-111-0.53%
FTSE JSE Fledgling 4,755.74250.52%
FTSE/JSE Alt X 1,120.56-2-0.15%
CAPPED PROPERTY 309.80-0.40%
RESOURCE 30,766.18-386-1.24%
DIVIDEND PLUS172.98-1-0.36%
FTSE/JSE RAFI 406,601.91-43-0.65%
Capped Top 4014,722.91-109-0.74%
Capped All Share15,913.37-107-0.67%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
25 Jan 2011SPESCOMMarch 2011 (Interim)
26 Jan 2011CBHDecember 2010 (Interim)
28 Jan 2011HUDACONovember 2010 (Final)
31 Jan 2011CAPITALDecember 2010 (Final)
02 Feb 2011GIJIMADecember 2010 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
FOORDCMPS11-01-2011-02-0411-02-14R 0.5385
DIALOGUE11-01-1311-02-1811-02-28R 0.1238
SBRJSEP1110-12-1511-03-0411-03-15R 1.4100
WINHOLD10-11-2911-02-1111-02-21R 0.1000
UCS10-11-2311-02-0411-02-14R 0.0500
Ex Div**
Share NameDec-DateLDTPay-DateAmount
CLICKS10-10-2111-01-2111-01-31R 0.7570
FREEWORLD10-11-2411-01-2111-01-31R 0.0700
NAMPAK 6.510-12-0911-01-2111-01-31R 0.0650
NAMPAK 6%P10-12-0911-01-2111-01-31R 0.0600
REUNERT5.511-01-0511-01-2111-01-31R 0.0550

Upcoming AGMs**
CodeCompany NameDateStatus
ABLPAfrican Bank Investments Ltd25/01/2011Confirmed
ABLAfrican Bank Investments Ltd25/01/2011Confirmed
NCANew Corpcapital Ltd26/01/2011Confirmed
SDHSecureData Holdings Ltd26/01/2011Confirmed
RINRedefine Properties International Ltd26/01/2011Confirmed

Stock Exchange News Service
25/01/201117:43- Chrometco Limited - Disposal of Rooderand Assets, BEE transaction,
25/01/201117:33ZGOVI - ZSHARES GOVI - Listing of additional ZGOVI participatory interests
25/01/201117:25OML - Old Mutual plc - FORM 8.3
25/01/201116:52OILRMB - RMB OIL ETN 08DEC2015 - Announcement
25/01/201115:27 Buildmax - Dealing in Securities
25/01/201115:00 Datatec Limited - Further issue of shares
25/01/201114:45ABL/ABLP - African Bank Investments Limited - Report on proceedings at Annual
25/01/201114:36 Firestone Energy Limited - Application for quotation of additional
25/01/201114:14 Gold Fields Limited - Gold Fields to release results for the quarter and
25/01/201113:13 Insimbi -Renewal of Cautionary announcement
25/01/201113:00 Oando - Oando Earnings Forecast for the first quarter ending 31 March 2011
25/01/201111:47 Verimark - Dealing in securities by a director
25/01/201110:22 Capitec Bank Holdings Limited - Transaction in securities by an associate
25/01/201110:21CPI/CPIN - Capitec Bank Holdings Limited - Transactions in securities by a
25/01/201110:20 Tawana Resources NL - Quarterly Activities and Cash Flow Report 1 October
25/01/201109:52 Palabora - Trading Statement
25/01/201108:51 RGT Smart - Renewal of Cautionary Announcement
25/01/201108:00 Fountainhead Property Trust - Proposed acquisition by Fountainhead
25/01/201107:45 Petmin - Investment in Hummingbird Resources Plc ("Hummingbird")
25/01/201107:30 Harmony Gold Mining Company Ltd - Excellent results at Harmony`s PNG
25/01/201107:11 Freeworld Coatings Limited - Response to SENS announcement of Kansai Paint
25/01/201107:05 BHP Billiton Plc - Transaction in shares

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