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Port Elizabeth - Shares continued on its strong start of 2014 during the last week with a host of commodity shares increasing by more than 10%, such as Anglo American [JSE:AGL] and Gold Fields [JSE:GFI] which rose by about 13%.
AngloGold Ashanti [JSE:ANG] chalked up an increase of above 17% and Kumba Iron Ore [JSE:KIO] lifted by nearly 11%.
The reasons for the strong performance of mining and commodity shares are twofold: the rand has remained week for a few months now and seems to remain quite weak, which will boost rand earnings by some 25% compared to last year with no change in operations or any change in commodity prices.
The second reason for renewed appetite for commodity shares is that commodity prices are starting to improve and expectations are for further improvement as recent figures point to stronger global economic growth.
It was interesting to note than platinum shares increased significantly on news that opposing unions are once again heading for confrontation, by promising workers higher salaries and threatening strikes.
This news bumped prices of platinum group metals higher as SA is the world's largest producer of these rare metals. Car sales in the US and Europe are showings signs of improvement after a few bad years, and platinum metals are indispensable and have no substitute for cleaning cars' exhaust emissions.
Anglo Platinum (Amplats) [JSE:AMS] increased by more than 10% during the last week and EastPlats [JSE:EPS] by a massive 16%.
Retail shares suffered in choppy seas with strong head winds after Mr Price [JSE:MPC], Truworths [JSE:TRU] and Shoprite [JSE:SHP] confirmed investors' fears that retail sales had not been that strong during the festive season. Mr Price dropped nearly 5%, Truworths 2.5% and Shoprite 4.5%.
The week ahead
All eyes will be on trade unions in the platinum belt and the platinum price, as well as the exchange rate.
BHP Billiton [JSE:BIL] is scheduled to publish an operational update for the three months to end-December, which will give an indication of commodity markets and production levels in the industry.
Banking and financial shares will also attract attention after the past week's fairly big declines as these shares offer better value than a few weeks ago, while there has been little change in the industry's operational environment during the last few days.
International markets are also expected to remain strong after reaching levels last seen before the financial crisis of 2008, which should keep JSE indices at the current high levels.
- Fin24
*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.
AngloGold Ashanti [JSE:ANG] chalked up an increase of above 17% and Kumba Iron Ore [JSE:KIO] lifted by nearly 11%.
The reasons for the strong performance of mining and commodity shares are twofold: the rand has remained week for a few months now and seems to remain quite weak, which will boost rand earnings by some 25% compared to last year with no change in operations or any change in commodity prices.
The second reason for renewed appetite for commodity shares is that commodity prices are starting to improve and expectations are for further improvement as recent figures point to stronger global economic growth.
It was interesting to note than platinum shares increased significantly on news that opposing unions are once again heading for confrontation, by promising workers higher salaries and threatening strikes.
This news bumped prices of platinum group metals higher as SA is the world's largest producer of these rare metals. Car sales in the US and Europe are showings signs of improvement after a few bad years, and platinum metals are indispensable and have no substitute for cleaning cars' exhaust emissions.
Anglo Platinum (Amplats) [JSE:AMS] increased by more than 10% during the last week and EastPlats [JSE:EPS] by a massive 16%.
Retail shares suffered in choppy seas with strong head winds after Mr Price [JSE:MPC], Truworths [JSE:TRU] and Shoprite [JSE:SHP] confirmed investors' fears that retail sales had not been that strong during the festive season. Mr Price dropped nearly 5%, Truworths 2.5% and Shoprite 4.5%.
The week ahead
All eyes will be on trade unions in the platinum belt and the platinum price, as well as the exchange rate.
BHP Billiton [JSE:BIL] is scheduled to publish an operational update for the three months to end-December, which will give an indication of commodity markets and production levels in the industry.
Banking and financial shares will also attract attention after the past week's fairly big declines as these shares offer better value than a few weeks ago, while there has been little change in the industry's operational environment during the last few days.
International markets are also expected to remain strong after reaching levels last seen before the financial crisis of 2008, which should keep JSE indices at the current high levels.
- Fin24
*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.
