Thursday, 27 September 2012 - 20:00
Charts
Monetary Policy Impacts on Share Prices Central banks all attempt to modify the cost of money or interest rates, the supply of money, and the availability of money. This is known as their monetary policy. All things being equal the lower the cost of money and the greater its supply, the greater the economic activity and vice versa.
Typically a central bank modifies the interest rate through various conventional means. This includes setting short term interest rates, buying and selling short term government bonds from / to financial institutions in the open market.
Since the global financial crisis in 2007/2008 – which had a severe impact on the housing, employment, and general economies of developed markets – central banks have been struggling to revive their economies. In the years and even decades up to the crash, lowering the cost of debt provided a quick fix to an economy that loved debt. But post the bubble it’s been a struggle to resuscitate economies even as central banks have brought interest rates down to record low levels of close to 0%.
Because central banks now don’t have much room to manoeuvre on the interest rate front, they have embarked, over the last 4 years, on various methods of quantitative easing (QE). This is an attempt to stimulate the real economy when the more conventional means are not as effective. In the latest announcement from the US Federal Reserve, it will involve buying up to $40 billion per month of agency mortgage backed securities.
The Federal Reserve did this after the 2007/2008 financial crisis, trying to provide a backstop to the financial system by printing and buying up $600 billion in mortgage backed securities. Then in November 2010 the US Federal Reserve announced a second round of quantitative easing (QE2) through a process of buying $600 billion of treasury securities.
The chart below reflects the US Federal Reserve Balance sheet expansion due to printing from around $800 billion to almost $3 trillion.
US Fed Balance Sheet
Source: US Federal Reserve website
Now the QE3 announced last week sees a reversion to the government buying private mortgages held by the government sponsored agencies. Because the US Federal Reserve owns a lot of other debt which matures over time, it will also reinvest all proceeds its receives. The sum of these actions is a monthly purchase of around $85 billion and according to the Fed Reserve, “......should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”
The Fed is linking the fresh injection of money into the banking system with the labour market and will only stop once there is a substantial improvement in the labour market, saying “To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthen.”
So far it’s difficult to see what the very accommodative monetary policy has done for the real economy, but one apparent consequence has been an on-going upward rise in share prices following the 2008 sell off. Given the stated intention of officials to continue for as long as it takes, this should provide an on-going underpin to the price of risk assets.
Kind regards,
Ian de Lange
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Thu, 27 Sep 2012
Top News
Revenue for the year fell marginally to R81.0 million (2011: R81.5 million). Operating profit shot up to R8.5 million (2011: R6.3 million). Total comprehensive income attributable to owners of the company more than doubled to R7.2 million (2011: R2.6 million). In addition, headline arning pe Full story
The results for the prior reporting period were prepared on a liquidation basis as the merger between Simmers and Village was successfully concluded. The prior period relates to 15 months and is therefore not comparable to current reporting period. Total comprehensive loss attributable to ow Full story |
|
|
|
|
Markets | U.S. stocks added to gains in
afternoon trading on Thursday, with the S&P 500 and Nasdaq up
more than 1 percent as investors. . . Full story | | European shares closed a touch
higher in thin trade on Thursday, lifted by expectations of
economic stimulus in China, but uncertainty about Spain's. . . Full story | | U.S. stocks rallied on
Thursday, putting the S&P 500 on track to snap a five-day
retreat, after Spain unveiled its plans for economic. . . Full story | | Stocks rallied and the euro
rebounded from two-week lows on Thursday after the Spanish
government said it would cut spending sharply and opened. . . Full story |
|
| Gains by bank and mining stocks
helped lift Britain's benchmark share index on Thursday,
although investors said worries over the euro zone could. . . Full story | | European shares further trimmed
gains on Thursday afternoon as disappointing U.S. home sales
figures dented already fragile investor sentiment after mixed
economic data earlier. . . Full story | | U.S. stocks rose modestly at
the open on Thursday after weak data reflected sluggish U.S.
economic growth and dented optimism China would take. . . Full story | | U.S. stock index futures pared
some earlier gains and were poised to open modestly higher
Thursday in the wake of weak data that. . . Full story |
|
SA Business | Gold prices ended down on
Wednesday but off an earlier two-week low as a stronger dollar
and weaker crude oil triggered profit-taking after bullion's
recent sharp rally boosted by stimulus by central banks around
the world.
The metal was weighed down by gains in the U.S. dollar after
data showed new U.S. home sales held near two-year highs in
August and prices vaulted to their highest in more than five
years.
Bullion has extended its losses to a third straight day. It
is still 3.5 perc. . . Full story |
|
| World no. 2 platinum producer Impala Platinum said on Thursday it was giving workers a "pay adjustment" and details would follow, against the backdrop of a wave of illegal strikes sweeping South Africa's mining sector.. . . Full story | | South Africa's rand firmed against the dollar early on Thursday, still supported by foreign portfolio flows as fund managers gear up for the inclusion of government debt into Citigroup's World Government Bond Index from next week.. . . Full story |
|
Company News | Shareholders were advised that the company's integrated annual report for the year ended 31 March 2012 were posted to shareholders on. . . Full story | | Further to Shoprite's preliminary results for the year ended 30 June 2012, released on SENS on 21 August 2012, the integrated. . . Full story | | Anglo draws attention to an announcement issued by Amplats, the text of which is set out below: Anglo American Platinum commences. . . Full story | | Amplats is providing an update in respect of its Rustenburg operations, following resumption of those operations on Tuesday 18 September 2012.. . . Full story |
|
| Shareholders are advised that the Annual Integrated Report of Implats for the year ended 30 June 2012, which includes the annual. . . Full story | | Omnia shareholders ("Shareholders") are advised that at the duly constituted annual general meeting of Shareholders held on Thursday, 27 September 2012,. . . Full story | | American Platinum announced the resignation of Ms Albertinah Kekana, a non-executive director of the company, effective 25 September 2012.. . . Full story | | Terms not defined in this announcement shall have the meanings given to them in the circular posted to Mvela Group ordinary. . . Full story |
|
Company Results | Revenue decreased to R2.5 billion (R2.6 billion). EBITDA amounted to a loss of R517 000 (loss of R211.8 million) and an. . . Full story | | Interest income for the interim period shot up 56% to R3.0 billion (2011: R1.9 billion). Income from operations grew 32% to. . . Full story | | Income from operations increased 6% to R936.5 million (2011: R883.2 million). Profit from operations fell 16% to R82.5 million (2011; R98.4. . . Full story | | Revenue from continuing operations increased from R354.2 million to R420.8 million in 2012. Gross profit increased to R88.3 million (June 2011:. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 35616.60 | 201.00 | 0.57% | JSE Top 40 | 17:00 | 31393.10 | 230.00 | 0.74% | JSE Gold | 17:00 | 2344.22 | 28.00 | 1.22% | JSE Financial | 17:00 | 26846.75 | 21.00 | 0.08% | JSE Industrial | 17:00 | 41864.27 | 82.00 | 0.20% | JSE Indust 25 | 17:00 | 35750.55 | 82.00 | 0.23% | JSE Resource | 17:00 | 47805.53 | 722.00 | 1.53% | DJ Futures | 19:48 | 13420.00 | 9.00 | 0.07% | DJ Ind | 19:58 | 13512.16 | 54.61 | 0.41% | SP 500 | 19:58 | 1448.99 | 7.40 | 0.51% | Nasdaq | 19:58 | 3136.85 | 19.12 | 0.61% | FTSE 100 | 17:35 | 5779.42 | 11.33 | 0.20% | DAX | 19:48 | 7290.02 | -135.09 | -1.82% | CAC40 | 19:48 | 3439.32 | 24.48 | 0.72% | Nikkei | 08:30 | 8949.87 | 43.17 | 0.48% | Shanghai | 09:28 | 2056.32 | 52.15 | 2.60% | Hang-Seng | 10:28 | 20762.29 | 234.56 | 1.14% | All Ords | 08:57 | 4402.80 | 20.30 | 0.46% | NZSE 50 | 07:50 | 3809.03 | -.29 | -0.01% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:58 | 1776.91 | 23.17 | 1.32% | Gold R | 19:58 | 14610.38 | 198.05 | 1.37% | Gold R/kg | 19:58 | 469441 | 769 | 0.16% | Silver $ | 19:58 | 34.5890 | .6680 | 1.97% | Platinum $ | 19:58 | 1642.20 | 10.20 | 0.63% | Palladium $ | 19:56 | 631.00 | 3.20 | 0.51% | R157 | 14/09 | 5.45 | -.03 | 0.00% | R204 | 14/09 | 6.18 | -.06 | 0.00% | Brent Crude | 19:58 | 113.07 | 4.37 | 4.02% | Rand / Dollar | 19:58 | 8.2224 | 0.0020 | 0.02% | Rand / Pound | 19:55 | 13.3142 | 0.0538 | 0.41% | Rand / Euro | 19:55 | 10.6152 | 0.0316 | 0.30% | Rand / NZD | 19:58 | 6.8412 | 0.0632 | 0.93% | Rand / AUD | 19:55 | 8.5975 | 0.0650 | 0.76% | Yen / Dollar | 19:58 | 77.6270 | -0.0940 | -0.12% | Euro / Dollar | 19:58 | 0.7743 | -0.0025 | -0.32% | Dollar / Euro | 19:58 | 1.2916 | 0.0039 | 0.30% | Pound / Dollar | 19:55 | 0.6157 | -0.0025 | -0.40% |
|
Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
---|
27/09/2012 | 186 | 181 | 76 | 443 | 239,165,618 | R12,936,194,889 | 125436 | 1743517 | 26/09/2012 | 128 | 228 | 66 | 422 | 244,470,725 | R14,128,719,079 | 117892 | 1141913 | 25/09/2012 | 170 | 210 | 66 | 446 | 206,657,413 | R12,991,817,012 | 137835 | 889888 | 21/09/2012 | 152 | 194 | 77 | 423 | 247,983,683 | R14,408,434,396 | 121678 | 1824624 | 20/09/2012 | 168 | 185 | 73 | 426 | 331,905,230 | R23,343,922,255 | 113845 | 1868106 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 31,393.00 | 230.00 | 0.74% | Industrial | 41,864.00 | 82.00 | 0.20% | Mid Cap | 51,349.00 | -79.00 | -0.16% | Small Cap | 38,123.00 | -239.00 | -0.62% | Resource 20 | 47,805.00 | 722.00 | 1.53% | Industrial 25 | 35,750.00 | 82.00 | 0.23% | Financial 15 | 9,981.00 | 23.00 | 0.23% | Financial & Ind. 30 | 39,018.00 | 101.00 | 0.26% | All Share | 35,616.00 | 201.00 | 0.57% | Oil & Gas | 27,659.00 | 430.00 | 1.58% | Mining | 30,544.00 | 456.00 | 1.52% | Gold Mining | 2,344.00 | 28.00 | 1.22% | Platinum Mining | 48.00 | 1.00 | 2.51% | GENERAL MINING | 7,930.00 | 125.00 | 1.61% | Oil & Gas Producers | 14,871.00 | 230.00 | 1.58% | Basic Materials | 26,192.00 | 362.00 | 1.40% | Chemicals | 15,826.00 | -158.00 | -0.99% | Forestry & Paper | 15,061.00 | 22.00 | 0.15% | Industrial Metals | 26,461.00 | 243.00 | 0.93% | Industrials | 34,825.00 | -50.00 | -0.14% | General Industrials | 99.00 | .00 | -0.18% | Consumer Goods | 35,763.00 | -16.00 | -0.05% | Automobiles & Parts | 6,499.00 | -67.00 | -1.02% | Household Goods | 167.00 | -1 | -0.60% | Health Care | 48,954.00 | -7.00 | -0.02% | Beverages | 123.00 | .00 | 0.76% |
| | Index Name | RP | Move | % Move | Food Producers | 64,975.00 | 883.00 | 1.38% | Personal Goods | 501.00 | -6.00 | -1.19% | Consumer Services | 75,881.00 | 1305.00 | 1.75% | General Retailers | 61,674.00 | 105.00 | 0.17% | Travel & Leisure | 4,309.00 | -72.00 | -1.65% | Media | 112.00 | 5.00 | 4.93% | Support Services | 2,149.00 | -13.00 | -0.64% | Telecommunications | 75,516.00 | -940.00 | -1.23% | Financials | 26,846.00 | 21.00 | 0.08% | Banks | 47,828.00 | 113.00 | 0.24% | Non-life Insurance | 46,450.00 | 169.00 | 0.37% | Life Insurance | 22,780.00 | 174.00 | 0.77% | General Financial | 2,432.00 | 10.00 | 0.41% | Technology | 33,288.00 | -42.00 | -0.13% | SHARIAH TOP40 | 3,071.00 | 21 | 0.70% | FTSE/JSE SHARIAH ALL | 3,190.00 | 19 | 0.62% | COAL MINING | 20,578.00 | 647 | 3.25% | FTSE JSE Fledgling | 5,555.00 | -48 | -0.87% | FTSE/JSE Alt X | 1,141.00 | -1 | -0.10% | SA LISTED PROPERTY | 484.00 | | -1.07% | CAPPED PROPERTY | 387.00 | | -0.96% | RESOURCE | 26,330.00 | 395 | 1.53% | DIVIDEND PLUS | 197.00 | 1 | 0.61% | FTSE/JSE RAFI 40 | 7,257.00 | 39 | 0.55% | Capped Top 40 | 16,561.00 | 116 | 0.71% | Capped All Share | 18,018.00 | 100 | 0.56% | JSE TABACO | 5,443.00 | -16 | -0.30% |
|
Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | IPL | IMPERIAL HOLDINGS LTD | HOLD | 25/09/2012 | RLO | REUNERT LIMITED | SELL | 25/09/2012 | ALT | ALLIED TECHNOLOGIES LIMIT... | HOLD | 25/09/2012 | BIL | BHP BILLITON PLC | HOLD | 25/09/2012 | TRU | TRUWORTHS INTERNATIONAL L... | SELL | 25/09/2012 |
|
|
Results Expected** Expected | Company Name | Fin. Date | 28/09/2012 | ACCENT | June 2012 (Final) | 28/09/2012 | AFEAGLE | June 2012 (Interim) | 28/09/2012 | AFRO-C | June 2012 (Final) | 28/09/2012 | AFROC-P | June 2012 (Final) | 28/09/2012 | AND | June 2012 (Interim) |
|
Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | PUTPROP | 20/09/2012 | 05/10/2012 | 15/10/2012 | R 0.1800 | REMGRO | 20/09/2012 | 09/11/2012 | 19/11/2012 | R 1.8800 | ELBGROUP | 19/09/2012 | 19/10/2012 | 29/10/2012 | R 0.5200 | ELBGROUP6 | 19/09/2012 | 19/10/2012 | 29/10/2012 | R 0.0600 | TELEMASTR | 19/09/2012 | 19/10/2012 | 29/10/2012 | R 0.0100 |
|
|
Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | ARM | 03/09/2012 | 20/09/2012 | 01/10/2012 | R 4.7500 | IMPERIAL | 22/08/2012 | 20/09/2012 | 01/10/2012 | R 3.8000 | IMPERIALP | 22/08/2012 | 20/09/2012 | 01/10/2012 | R 3.7227 | ASSORE | 03/09/2012 | 20/09/2012 | 01/10/2012 | R 3.0000 | SA CORP | 20/08/2012 | 20/09/2012 | 01/10/2012 | R 0.1517 |
|
Upcoming AGMs** Code | Company Name | Date | Status | OMN | Omnia Holdings Ltd. | 27/09/2012 | Confirmed | OMP | Omnia Holdings Ltd. | 27/09/2012 | Confirmed | HUG | Huge Group Ltd. | 28/09/2012 | Confirmed | CSP | Chemical Specialities Ltd. | 28/09/2012 | Confirmed | ABK | African Brick Centre Ltd | 03/10/2012 | Unconfirmed |
|
|
Stock Exchange News Service Click here for more SENS news
|