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Port Elizabeth - People tend to focus on recent events and in financial markets they seem to allot more weight to the most recent events.
In short, human nature tends to take Friday's market movements rather more seriously than the overall trend of the last few weeks. The last week is a good case in point.
Most shares on the JSE declined on Friday and market comment changed immediately to the negative. Facts are that the market is still quite strong, due solely to the decline of the rand to the lowest level since 2008. To add to the current negative sentiment is that 2008 marks the date in which the world has seen the largest market crash ever.
Back to facts: The last week saw quite healthy movements on the market. Anglo American (JSE:AGL) increased by around 1% during the last week, while counterpart BHP Billiton (JSE:BIL) declined by just more than 1% . The rest of the shares in this sector ended mixed as well.
Gold shares were very strong. Over the last week AngloGold (JSE:ANG) gained more than 9% and Harmony (JSE:HAR) increased 12.2%. DRD Gold (JSE:DUR) rose 4.4% and Gold Fiields Ashanti (JSE:GFI) added nearly 7%.
The benefits of the decline in the rand to above R11/$ - compared with levels of around R6.80 not that long ago - to platinum companies seem to weigh much more than the loss in income due to a strike of a few weeks.
That is at least the case in analysts' Excel models over the short term as higher platinum prices and a weaker rand seem to boost earnings, even if mines produce only for 10 or 11 months this year.
Shares of all platinum companies continued to increase during the week, despite concerns about the US Federal Reserve"s anticipated change in policy and lower growth in China.
Banks, retailers and industrial shares pottered along without a clear trend as pessimist and optimists seem to balance each other effectively without any surprises to see huge price movements.
The week ahead
The week ahead seems to hold more promise for entertainment and opportunities for fund managers to gain some of the much-loved beta returns.
Amplats (JSE:AMS), Kumba Iron Ore (JSE:KIO) and Anglo (JSE:AGL) are set to tell the market how things were going in the world during the three months to December, while shareholders will have the opportunity to ask some questions at Barloworld (JSE:BAW), Clicks (JSE:CLS) and Lonmin (JSE:LON) annual general meetings.
Most important, is the SA reserve bank's first monetary policy meeting for 2014, where the weak rand, inflationary pressures, worsening economic prospects and low confidence are likely to set the scene for a very difficult decision on interest rates.
In short, human nature tends to take Friday's market movements rather more seriously than the overall trend of the last few weeks. The last week is a good case in point.
Most shares on the JSE declined on Friday and market comment changed immediately to the negative. Facts are that the market is still quite strong, due solely to the decline of the rand to the lowest level since 2008. To add to the current negative sentiment is that 2008 marks the date in which the world has seen the largest market crash ever.
Back to facts: The last week saw quite healthy movements on the market. Anglo American (JSE:AGL) increased by around 1% during the last week, while counterpart BHP Billiton (JSE:BIL) declined by just more than 1% . The rest of the shares in this sector ended mixed as well.
Gold shares were very strong. Over the last week AngloGold (JSE:ANG) gained more than 9% and Harmony (JSE:HAR) increased 12.2%. DRD Gold (JSE:DUR) rose 4.4% and Gold Fiields Ashanti (JSE:GFI) added nearly 7%.
The benefits of the decline in the rand to above R11/$ - compared with levels of around R6.80 not that long ago - to platinum companies seem to weigh much more than the loss in income due to a strike of a few weeks.
That is at least the case in analysts' Excel models over the short term as higher platinum prices and a weaker rand seem to boost earnings, even if mines produce only for 10 or 11 months this year.
Shares of all platinum companies continued to increase during the week, despite concerns about the US Federal Reserve"s anticipated change in policy and lower growth in China.
Banks, retailers and industrial shares pottered along without a clear trend as pessimist and optimists seem to balance each other effectively without any surprises to see huge price movements.
The week ahead
The week ahead seems to hold more promise for entertainment and opportunities for fund managers to gain some of the much-loved beta returns.
Amplats (JSE:AMS), Kumba Iron Ore (JSE:KIO) and Anglo (JSE:AGL) are set to tell the market how things were going in the world during the three months to December, while shareholders will have the opportunity to ask some questions at Barloworld (JSE:BAW), Clicks (JSE:CLS) and Lonmin (JSE:LON) annual general meetings.
Most important, is the SA reserve bank's first monetary policy meeting for 2014, where the weak rand, inflationary pressures, worsening economic prospects and low confidence are likely to set the scene for a very difficult decision on interest rates.
