The local stock exchange is in a state of panic. Yesterday, stocks were down 3.11% resulting in a total weekly loss of 7%. Many economists are not really surprised with the events taking place on the JSE with some saying that it is “normal” for the market to have a correction after shares have “run for so hard so long”. Another contributing factor to the slump of the JSE may be attributed to the strengthening of the rand as local investors look to sell off their shares and opt for trading in the currencies market. The rand had strengthened by more than one percent to a one-month high against the dollar on Thursday, adding to Wednesday’s sharp gains.

By 15:45 yesterday, the rand was bid at R7.7589/$ from a previous close of R7.8391. It was bid at R12.2225/€ from a previous R12.4526 and at R15.3823/£ from R15.6329 before.

The local markets may continue to ’slump’ as they are doing now and global economic news will not help the cause. Global markets have been faced with a spate of negative news ranging from the sub-prime credit crisis in the US to record oil prices fuelled by supply deficit fears. Oil breached through $144 per barrel on Thursday. But the currently levels the JSE is experiencing are not the worst, many tend to forget that at the beginning of the year, the JSE all share index was at 25 397 points. Right now with this current ’slump’, the index is at 28 392, 190 points, so it is all not doom and gloom.

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