Last week we watched fascinated by the sight of a marquee being pitched on the open space beneath our windows. Someone, it seems, had decided that a shopping-centre car park was the ideal place to hold a party. Certainly there was ample parking and Monday’s clean up was quickly effected by means of the fire hose, but it must have been chilly standing on that bleak concrete slab after dark. Stories reached us that it was not a corporate event but some kind of personal celebration. Since none of us in the office “cracked the nod” it must have been a classy event for the rich and famous. Pity. We in this business need some cheering up these days.
There are still no major (or even tiny) themes to seize upon and ride to some sort of satisfying conclusion. The office punters duck and dive, alternately cheering and booing as the rand’s see-saw action makes the pick of the day bounce like one of those superballs one used to play with until it got lost in the hedge. Come to think of it there’s lots of getting lost in the hedge in this game too. Just ask SAA.
My email in-box has been receiving an increasing number of ever more frantic promises of riches for me and my clients. It is probable that somewhere in the list of exotic and complex derivative products there are instruments that if timed correctly will make us all happier. However, my own tedious combination of age, conservatism and cynicism makes me a bad target market for these toys. I find it hard enough trying to understand just what is going on in the companies themselves without trying to decide what might be the best way to leverage my view.
This week saw the start of the release of the mining company quarterly reports. They seem a pretty mixed bag to me but eight of this week’s top ten movers (increase in market cap.) are resource stocks. This surge has been enough to drag the all share index to its high point for the month but still a long way off the year’s highs set on 3rd March. Other company announcements included yet another complicated deal involving Mvelaphanda, a timetable for the squashing of Kersaf and SISA into one and a wish from Sappi that the global economy would get a move on.
This wish will face some headwind if the oil price continues to flirt with lifetime highs well north of $40 per barrel. Did you know that an ounce of gold will now buy you only 10 barrels of the black stuff? This is the lowest number in three years and puts the price, in these terms, some 35% higher than the levels we were enjoying at the end of last year. It is hard to see how we will contain the inflation rate here on the gold-producing Southern tip. Perhaps by dropping fuel prices from the equation – as they seem to have done elsewhere?
In deference and terror I refrained last week from mentioning the ‘bokke’s challenges down under. Am I now being now overconfident in suggesting that by tomorrow evening we will all be roaming the streets looking for a marquee to gatecrash and celebrate in?
James Greener
30 July 2004
