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JSE hits high after high

Port Elizabeth - Robust results from companies that opened the reporting season on the JSE, a weak rand, stronger international markets and indications that the world economy is gaining momentum, has sent SA shares higher day after day last week, with main indices recording record highs.

Investors seemed to have totally ignored negative news, such as the higher inflation numbers, lacklustre retail sales, labour unrest and the effect of higher petrol prices and interest rates on economic activity.

Ignoring bad news is a sure sign of a bullish market. One can only hope those pesky bears used tight stop losses on their short trades as most of the favourite big capitalisation shares hit new highs this week.

The JSE Top-40 index closed on its highest ever on Friday afternoon, mostly due to a last-minute spurt when US markets opened stronger and seemed to be heading higher.

It seems that foreign investors - who were net sellers of SA shares a few weeks ago - are back with a vengeance. Our shares are much cheaper for foreign investors due to the decline in the rand, while those international companies that earn dollars and report their results in dollars benefit from a weaker rand.
 
The week ahead

It is difficult to comprehend that the market can go even higher - it has been in a bull trend for the last 10 years with only a few hiccups to keep things interesting. On a long term graph of the JSE All Share index the 2008 correction in world markets is hardly noticeable.

It is equally difficult to say with any conviction that share prices are too high. Last week, Discovery Health [JSE:DSY] announced good results which (nearly) justifies its share price.

The same might be said this week when Nedbank [JSE:NED], AECI [JSE:AFE], British American Tobacco [JSE:BTI], Massmart [JSE:MSM] and Bidvest [JSE:BVT] report results this week.

On the negative side, StatsSA is expected to bring less than rosy news when it announces economic growth figures for the last quarter of 2013 on Monday and equally bad news when it discusses production inflation on Thursday.

Investors are probably not expecting good news from Impala Platinum [JSE:IMP] when it reports results for the six months to December this week, after Northam Platinum [JSE:NHM] reported its first loss since 1999 last week, due to the effect of labour unrest on production.

But all eyes will be firmly on Finance Minister Pravin Gordhan when he tables his National Budget in parliament on Wednesday. His take on economic growth - to be proven by actual tax receipts during the last financial year and expected tax income in the new - will definitely grab market attention.

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Rand - Dollar
18.89
+0.2%
Rand - Pound
23.84
+0.3%
Rand - Euro
20.38
+0.3%
Rand - Aus dollar
12.31
+0.3%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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