Port Elizabeth – There was some excitement on the JSE the past week with uncertainty surrounding cellular companies' revenue, and it will continue to be watched carefully, but the rand, commodity prices and the US debt crisis are bound to dominate markets in the coming week.
The week that was
We saw a bit of excitement on the JSE the past week with quite large intra-day movements as there seems to be enough arguments for the market to continue to notch up successive records, and enough reasons for the market to take a bit of a breather and the index to drop a couple of thousand points.
Uncertainty surrounding cellular companies' revenue after government concern about the cost to consumers calling across networks saw Vodacom [JSE: VOD] drop some 7% during the week to end at 11500c, while MTN [JSE:MTN] ended a tad lower at 19800c after leading the declines in the sector the previous week.
Telkom [JSE:TKG] bucked the trend to end nearly 12% higher.
Gold shares declined sharply on Friday as the gold price dropped to the lowest level in 3 months due to a change in expectations surrounding the American government's finances.
It seems that politicians will, after all, agree to solve their cash flow problem. However, the gold sector still ended higher than a week ago.
Steel and related commodity counters came under renewed pressure, maybe on the back of lacklustre manufacturing data. Heavyweight Anglo American [JSE:AGL] and BHP Billiton [JSE:BIL] both ended the week lower to put a cap on the index.
International markets edged higher towards the end of the week, but without too much conviction.
The week ahead
The rand, commodity prices and the US debt crisis are bound to dominate markets in the coming week. Anglo American and Kumba Iron Ore [JSE:KIO] will attract attention towards Thursday when management supply latest operational results.
Gold shares might show continued weakness, while other commodity counters could show a bit of recovery after their bumpy ride the last few weeks.
Cellular companies will continue to be watched carefully. Their shares do not seem excessively expensive when looking at their price/earnings ratios, but negative sentiment might push them still lower.
The focus will stay on international shares at the expense of local companies due to the weaker rand and continued concerning news with regards to the SA economy, labour market, employment level, output and inflation.
SABMiller, the world's second largest beer brewer, will publish a trading update before the announcement of its first half figure due within weeks.
Analysts are due to revisit their models dealing with retail shares when StatsSA announces retail sales figures for August on Wednesday.
*After chasing money on the JSE for 15 years, Adriaan Kruger is now living a relaxed lifestyle in Wilderness and lectures economics part-time at Nelson Mandela Metropolitan University. Views expressed are his own.
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