Now that was a pretty hectic week. On St Patrick’s Day the market endured one of those quarterly futures close-out events. This means that share prices dance to the tune on the fiddles of leprechaun-like derivatives traders. Normally these fellows keep away from the rest of us and lurk in dark places muttering about “the greeks”. I am not ever going to try and explain what these are, except to assure you that there is nothing in the least xenophobic about it. But for a few days ahead of close out and on the day itself, market moves were being described as “irrational” – which is code for “no longer going straight up”. In fact some shares – notably the rand hedge ones – were reasonably strong, while many other market favourites were a bit wobbly. Which also describes the condition of some of the dealers who even now are just returning from the infamous close-out party. Just as well there are only four per year.
Sasol continued to run and run as shareholders failed to join in the government’s concern about the company’s promotion policy. I have yet to see any report from the US that Washington is disappointed that Disney’s new CEO isn’t Mickey Mouse.
In addition to an oil price setting lifetime highs almost every day, the rand has been leaking a bit and is trying on a new big figure coat in the dollar department (i.e. it’s over 6 to the USD!) and looking quite stylish.
Remember that if you would like to take a simple position on a weak rand and strong gold price, then the Exchange Traded Fund (ETF) called New Gold is listed on the JSE and trades just like a share. Its theoretical price is 1/100th of the gold price in rands and this month has run from 2550 cps to 2725cps. Another ETF, called New Rand (and also TrackHedge) is a basket of shares with rand hedge characteristics has run from 940 cps to 1000 cps in the same period.
The usual question is being asked with slightly more urgency these days. Is the bull market over? No one knows of course. It sounds clever, until you think about it, to say that the end is definitely getting closer. I am intrigued to hear just how many traders have been getting short (code for selling) or buying protection (put options).
For a reason that I haven’t worked out yet – and probably won’t bother to – the number of short weeks and long weekends at this time of year seems a bit fewer than in the past. Nevertheless, I am going to take some days off here and there. I have a graduation in Grahamstown to go to and a tent trip in the bush to try out. I shall not be taking a fishing rod on either excursion. I will take a cell phone though. I am worried that in the confusion created by the close-out and these holidays, the bear might just sneak in and set up camp. And he could cause more unhappiness than even the prospect of having to watch four South African sides competing for the wooden spoon in the Super 12. Fortunately there’s a Grand Prix early on Sunday.
Have a safe and happy long weekend.
James Greener
18th March 2005
