Monday, 22 December 2014 - 20:00
Seed Weekly - Let?s Recap on 2014
South Africa is facing many headwinds – some of the factors contributing to the restricted economic growth are:
In view of the rand getting hammered during the last couple of months to its weakest level vs the US dollar in 6 years, there was some good news with Fitch’s decision not to downgrade SA’s credit rating earlier this week. This meant that the rand firmed against the US Dollar after big recent losses but there is still concern, as analysts predict that SA’s credit rating could still be cut within the next six months. At time of writing the rand was trading at R 11.57 to the US dollar, R 18.08 to the British pound, and R 14.22 to the euro.
The weak rand continues to pose risks to the inflation outlook, given its vulnerability to swings in market sentiment as investors speculate on the timing and scale of monetary policy normalisation. CPI figure for the year as at end of November sits at 5.81\%. It is still within its target of 3%-6%. A sharply lower oil price will, however, put a big brake on inflation going forward.
Current Account and Budget Deficit
With the current account being traditionally funded by foreign portfolio inflows, the persistently large shortfalls on the budget and current accounts increase our vulnerability. The concern here would be that the United States is expected to raise interest rates in 2015, which in turn would reduce the appetite for investing in emerging markets.
The cumulative trade deficit for 2014 stands at R 95bn as at the end of October and this is R 20bn more compared to the same time in 2013.
The unemployment rate is over 25%.
Major role players state that load shedding and Eskom problems have cost us R 6bn so far – and that we could face electricity shortages for the next three to five years with the energy-hungry manufacturing and mining industries to be hit the hardest.
The world is in a general low growth, low demand, state with an oversupply of labour and commodities and a large supply of liquidity.
In the US, the stronger dollar represents a headwind for their economy but does help with their inflation. The low oil price (still under $ 60 per barrel) and low interest rate is also a welcome boost to their economy.
The emerging markets are slowing down with the MSCI emerging markets returning 2.2% year to date, compared to the developed markets which have returned 6.7% thus far. The big question is whether US growth will be strong enough to counter the falling growth in emerging markets and Europe in the coming year. European growth is only estimated to be 1.3% for 2015.
As expected, the above factors (among others) have had a major impact on the market for the year which is evident by looking at the year to date performance.
An ALSI return of 10.0%* for the year thus far, compared to 21.4% for 2013, makes for ugly reading.
There is, however, light at the end of the tunnel and long term investors should not be too concerned. In this environment, we are pleased that our unit trust funds have outperformed their benchmarks and peers for the year. (Figures below)
We want to make use of this opportunity to thank all our clients for their loyal support. Have a blessed Christmas and may 2015 be a prosperous year and one where South Africa brings home Cricket and Rugby World Cups.
021 914 4966
Mon, 22 Dec 2014
World Markets (Spot Prices)
|JSE Top 40||17:00||43583.20||-72.66||-0.17%|
|JSE Indust 25||17:00||61885.63||72.47||0.12%|
|Rand / Dollar||19:59||11.5492||-0.0200||-0.17%|
|Rand / Pound||19:55||17.9890||-0.0701||-0.39%|
|Rand / Euro||19:55||14.1493||-0.0060||-0.04%|
|Rand / NZD||19:57||8.9376||-0.0265||-0.30%|
|Rand / AUD||19:55||9.4046||-0.0218||-0.23%|
|Yen / Dollar||19:59||119.8920||0.3900||0.33%|
|Euro / Dollar||19:57||0.8162||-0.0017||-0.21%|
|Dollar / Euro||19:59||1.2252||0.0024||0.20%|
|Pound / Dollar||19:55||0.6405||0.0009||0.14%|
Click here for the Sharenet Spot Price page
The JSE Today
* Includes all listed instruments on the JSE
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||65,983.67||88.54||0.13%|
|Oil & Gas ||32,914.04||-1293.84||-3.78%|
|Oil & Gas Producers ||17,697.27||-695.68||-3.78%|
|Basic Materials ||22,637.15||-115.08||-0.51%|
|Forestry & Paper ||32,645.32||-8.28||-0.03%|
|Industrial Metals ||13,698.15||-405.23||-2.87%|
|General Industrials ||157.04||.29||0.19%|
|Consumer Goods ||63,299.93||90.13||0.14%|
|Automobiles & Parts ||7,332.32||-138.13||-1.85%|
|Health Care ||10,244.21||-47.34||-0.46%|
|Index Name||RP||Move||% Move|
|Food Producers ||9,419.76||41.01||0.44%|
|Personal Goods ||1,044.21||-5.29||-0.50%|
|Consumer Services ||13,807.78||39.96||0.29%|
|General Retailers ||71,924.09||694.40||0.97%|
|Travel & Leisure ||6,136.87||16.76||0.27%|
|Support Services ||2,896.60||-49.51||-1.68%|
|Non-life Insurance ||54,107.08||-765.67||-1.40%|
|Life Insurance ||37,185.11||93.66||0.25%|
|General Financial ||3,943.38||21.38||0.55%|
|SHARIAH TOP40 ||3,460.71||-28||-0.80%|
|FTSE/JSE SHARIAH ALL||3,720.34||-24||-0.63%|
|FTSE JSE Fledgling ||6,506.08||19||0.29%|
|FTSE/JSE Alt X ||1,402.07||-1||-0.09%|
|SA LISTED PROPERTY ||594.04||0.06%|
|CAPPED PROPERTY ||515.47||0.19%|
|FTSE/JSE RAFI 40||9,362.87||-9||-0.10%|
|Capped Top 40||23,264.89||-41||-0.17%|
|Capped All Share||25,025.80||-24||-0.10%|
|JSE TABACO ||8,151.50||127||1.58%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|BTI||BRITISH AM. TOBACCO PLC||BUY||19/12/2014|
|KIO||KUMBA IRON ORE LTD ||HOLD||16/12/2014|
|BIL||BHP BILLITON PLC||BUY||16/12/2014||
|Expected||Company Name||Fin. Date|
|24/12/2014||WINHOLD||September 2014 (Final)|
|25/12/2014||HWANGE||December 2013 (Final)|
|25/12/2014||HWANGE-A||December 2013 (Final)|
|31/12/2014||CHEMSPEC||September 2014 (Interim)|
|31/12/2014||CHEMSPECPREF||September 2014 (Interim)|
|REX TRUE6%||15/12/14||02/01/15||12/01/15||ZAR 0.0600|
|AF-OVR 6%PP||15/12/14||02/01/15||12/01/15||ZAR 0.0600|
|ECSP A||15/12/14||09/01/15||19/01/15||ZAR 0.9589||
Stock Exchange News Service
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