Vodacom finally got listed on the JSE yesterday (Monday 18 May) after doubts about the listing as investors were made to wait for a high court ruling over the weekend to be sure that the listing would occur. The trade union, COSATU, were the ones who wanted to stop Vodacom from listing on the JSE as they felt that it was not right for British company Vodafone to increase its stake in Vodacom from 50% to 60% thus giving the the British company a controlling stake in a South African company. COSATU had a valid point but Judge John Murphey dismissed COSATU’s court application.

If COSATU had gotten its way and Vodacom did not list on the JSE yesterday, that would have been a big blow to the South Africa economy as foreign investors would have been reluctant to invest in South Africa. But now that Vodacom has listed, we will see a R22.5 billion injection of foreign currency into the country from this deal. This R22.5 billion is much welcome in the economy as we have a large current account deficit.

What was interesting to note on the JSE yesterday was the Telkom share price. The share price of Telkom almost halved to R60 a share, as the market cap of Vodacom was taken out of Telkom and distributed to Telkom shareholders (along with a special dividend). The Vodacom share closed the day yesterday at R58.80 after having hovered around the R60 mark during the day. It will be interesting to keep an eye on the Vodacom share over the next couple of weeks to see how it performs.

The JSE closed 5.02% in the red today (Thursday). This has resulted in a three year low for the all share index as it touched 17 814 points. The drop in the JSE was attributed to weak Dow and other global markets, which remained down under the weight of negative conditions. Analysts are saying that this drop in the local market is part of a broader correction and they expect the drop to continue.

The JSE was also not helped by news that Impala Platinum has suspended its share buy-back programme. Shares in Impala, the world’s second-largest platinum producer, fell 17% today.
Read the rest of this entry »

After gains achieved in the last two days on the JSE, those gains were wiped out today as the local bourse lost nearly 7% following severe drops in overseas markets amid renewed fears of a global economic slowdown even after massive bank bailouts. Resources and platinum miners were the hardest hit, plummeting by more 11% and 13% respectively, as fears of global economic slowdown hit platinum group metals prices and all other base metals. Meanwhile investors still look towards gold as a safe haven but gold shares were unable to capitalise at the end of the day.

The all share index ended 6.99% in the red today, or 1 545 points, at 20 571.87, edging closer to breaching that 20 000 mark. Banks lost 1.26%, financials were down 2.91% and industrials shed 4.62%.

The rand was bid at R9.41/$ from R8.97 when the JSE closed on Tuesday, while gold was last quoted at $845.80 a troy ounce from $841.35/oz at the JSE’s last close.

If this were football, and the JSE were down 3 - 0 at half time after yesterdays slump, then today, the JSE would have pulled a goal back to make the score 3 - 1. The JSE staged a recovery today, the all share index ended 2.56% higher, largely due to a 3.27% rise in resources. The platinum mining index rallied 3.57%, but the gold mining index shed 0.96%. Firmer metal prices spurred a fresh round of buying for mining stocks which resulted in platinum miner Anglo Platinum (AMS) rising 6.79% to R582, Impala Platinum (IMP) gained 1.17% to R130 and Lonmin (LON) was up 6.54%, to R259.95. Investors are still looking to buy into resources at this stage, notably gold as they see it as a safe haven. This resulted in the price of gold to increase by 2% today.

Brewer, SABMiller (SAB) caught the eye today as it soared 8.57%. Could this have been spurred by the introduction of their new beer, Dreher onto the local market or just generally that, even during tough times consumers are still going to drink?

The rand continues to hover around the R8.82/$ mark with growing fears that the local currency could soon hit the R9.00/$ mark. One would assume that exporters would be very happy with the rand trading at R9.00/$ but with the current slow down in the world economy, the goods and services that would be exported may not be consumed by the consumers in the foreign countries that are struggling to get to grips with what is happening in the world markets.

The JSE had a technical glitch again yesterday (Monday 8 September). This is the second time in less than two months that trade has halted on the JSE; on July 14, the bourse failed to open on time when a network glitch stopped public data about the equities markets from reaching all its customers. Yesterdays error was blamed on the London Stock Exchange (LSE). A technical glitch hit the London Stock Exchange, the platform from which the Johannesburg Securities Exchange (JSE) trades went offline, affecting all trade of local equities, single-stock futures and associated instruments.

This glitch yesterday left traders seething as they missed out on cashing in as the markets were expecting a good rebound. Looking at potential losses; a broker has estimated that the stock broking community has lost about R100m in commissions based on the R15bn turnover that was meant to be expected whilst the exchange was down.

In the world of technology we live in today, such occurrences as yesterdays do happen but one has to weigh in the cost of some errors occurring. What is worrying is that, this is the second time this has happened in a short amount of time. Hopefully this does not become a trend with the JSE as it was set a bad example.

The JSE (Johannesburg Stock Exchange) only opened at mid-afternoon today after a network problem forced the exchange not to function properly. The JSE have said that they are embarrassed by this forced delay as it has cost brokers a lot of money and in turn also cost the JSE money. The JSE has had a pretty impressive track record over the last couple of years of having very minimal down time. Such technical and networks areas are expected all the time but contingencies have to be put in place so that an errors have a back up. In todays situation, there clearly was not a suitable back up plan and thus trading on the JSE started much later than normal. Read the rest of this entry »

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. Read the rest of this entry »