Tuesday, 05 April 2011 - 20:00
Sharenet is pleased to announce the launch of our new publication, The Sharenet Daily. We have built on the success of our Daily Equity Report, while adding more content and helpful information. The result is a publication that gives readers a quick, easy to read and informative synopsis of market activity, company results and news on the JSE for the day, as well as an overview of what transpired on important overseas markets.
The Sharenet Daily includes helpful charts that give a graphical impression of events, and our news content is sourced from a number of contributors, including Reuters. In addition, Sharenet's popular price information is available in our Spot Price format which provides a snapshot of the JSE and world indices, currencies and commodities.
All the JSE trading statistics; major movers; latest dividends; upcoming AGM dates and more are provided to insure that you keep abreast of market developments. The Sharenet Daily is published at 8pm each day on the website and also distributed via email for your convenience. As always, we welcome your comments, feedback and suggestions at firstname.lastname@example.org
What will increased interest rates do to risk aversion?
G10 countries are slowly but surely shifting into gear to raise interest rates. Low interest rates have been key to fuelling the global economy and to the lower risk aversion. Higher interest rates tend to increase risk aversion and are therefore typically negative for asset prices.
Today China raised its interest rates again – the fourth increase in 5 months. They increased by 0,25% to help tame inflation.
The European Central Bank is set to raise its interest rates this week. The general consensus is that rates will be hiked by 0,25% on Thursday from a record low 1%.
A Standard Bank report says that the Bank of England (BoE) looks like it may be “dragged kicking and screaming to hike rates.”
The US Federal Reserve still has some time to play with, but increasingly it is being pressured around the fringes of the Board of Governors, to increase interest rates and so tighten monetary policy.
All three of the globes main central banks are now likely to be pushing in the same direction – but there is going to be a big discrepancy in the timing of these hikes.
At this stage, the US Federal Reserve is not overly concerned that higher commodity prices will translate into higher core inflation. Ben Bernanke - the US Federal Reserve Chairman, said that as long as inflation expectations remain stable and well anchored, the increase in inflation caused by higher commodity prices will be transitory.
An increase in risk aversion?
The fixed income research team from Standard Bank does not believe that at this stage higher interest rates will spark increased risk aversion.
Their reasoning is that this is only likely to happen should the US dollar enjoy a significant rally across the board. At this stage the weaker dollar is helping reserve accumulation, which in turn is helping global liquidity and so would offset any negative impact of higher interest rates.
For the prospect of higher risk aversion to play out the US dollar would need to rally against the reserve accumulating currencies – i.e. The Asian currencies – not against the euro and sterling.
On this basis they don’t think that higher US interest rates in time will negatively impact risk assets.
Using similar logic, the thinking is that higher interest rates from the ECB – which is now the consensus - may likely weaken the US dollar against the main reserve accumulating currencies and so in this sense “higher rates may lead to stronger global liquidity, not weaker liquidity.”
So far the prospect of firmer interest rates has not affected risk aversion.
Ian de Lange
Tue, 05 Apr 2011
World Markets (Spot Prices)
|JSE Top 40||17:00||29421.90||186.66||0.64%|
|JSE Indust 25||17:00||27057.27||98.66||0.37%|
|Rand / Dollar||19:59||6.7213||0.0053||0.08%|
|Rand / Pound||19:55||10.9184||0.1162||1.08%|
|Rand / Euro||19:55||9.5602||0.0117||0.12%|
|Rand / NZD||19:58||5.1697||0.0143||0.28%|
|Rand / AUD||19:55||6.9575||-0.0068||-0.10%|
|Yen / Dollar||19:57||84.6900||0.5600||0.67%|
|Euro / Dollar||19:55||0.7029||-0.0002||-0.03%|
|Dollar / Euro||19:57||1.4224||0.0005||0.04%|
|Pound / Dollar||19:55||0.6136||-0.0061||-0.98%|
Click here for the Sharenet Spot Price page
The JSE Today
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||30,522.33||154.20||0.51%|
|Oil & Gas ||29,853.84||659.63||2.26%|
|Oil & Gas Producers ||16,051.86||354.67||2.26%|
|Basic Materials ||32,103.58||191.29||0.60%|
|Forestry & Paper ||14,607.12||91.36||0.63%|
|Industrial Metals ||31,175.79||395.40||1.28%|
|General Industrials ||76,765.24||-111.70||-0.15%|
|Consumer Goods ||26,350.72||309.12||1.19%|
|Automobiles & Parts ||3,147.60||-13.58||-0.43%|
|Health Care ||31,318.12||-47.92||-0.15%|
|Food Producers ||47,141.91||421.73||0.90%|
|Index Name||RP||Move||% Move|
|Personal Goods ||386.52||.20||0.05%|
|Consumer Services ||53,414.86||9.42||0.02%|
|General Retailers ||41,338.65||151.18||0.37%|
|Travel & Leisure ||3,634.99||-20.65||-0.56%|
|Support Services ||2,439.40||13.57||0.56%|
|Non-life Insurance ||31,162.51||244.92||0.79%|
|Life Insurance ||16,329.97||160.44||0.99%|
|General Financial ||2,310.86||21.25||0.93%|
|SHARIAH TOP40 ||3,333.79||17||0.52%|
|FTSE/JSE SHARIAH ALL||3,383.33||17||0.49%|
|FTSE JSE Fledgling ||4,500.42||19||0.41%|
|FTSE/JSE Alt X ||1,018.84||7||0.64%|
|SA LISTED PROPERTY ||368.28||0.26%|
|CAPPED PROPERTY ||306.73||0.38%|
|FTSE/JSE RAFI 40||6,851.53||43||0.63%|
|Capped Top 40||15,304.77||97||0.63%|
|Capped All Share||16,408.48||96||0.59%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|NED||NEDBANK GROUP LTD||HOLD||31 Mar|
|PAP||PANGBOURNE PROPERTIES LIM...||HOLD||31 Mar|
|SBK||STANDARD BANK GROUP LIMIT...||SELL||31 Mar|
|AIP||ADCOCK INGRAM HLGS LD||HOLD||31 Mar|
|LHC||LIFE HEALTHCARE GRP HLDG ...||BUY||31 Mar||
|Expected||Company Name||Fin. Date|
|06 Apr 2011||VIVIDEND||February 2011 (Interim)|
|08 Apr 2011||PHUMELELA||January 2011 (Interim)|
|11 Apr 2011||FAIRVEST||December 2010 (Interim)|
|11 Apr 2011||FAIRVESTP||December 2010 (Interim)|
|12 Apr 2011||PBT||February 2011 (Interim)|
|NTC PREF||11-04-01||11-04-19||11-05-03||R 3.4161|
|MMH||Miranda Mineral Holdings Ltd||07/04/2011||Confirmed||
Stock Exchange News Service
Click here for more SENS news