Oh well, that looks as if the rickety start to the year is out of the way and the bull is now back in charge. Only 250 points to another new high and that’s not even a one percent gain. This market can leap that much in the first ten minutes of trading on any fine summer’s day.
Already this year we have had a few results and trading updates from those companies that left their accountants sweating over hot keyboards while the rest of the staff went to splash in the waves. There’s been nothing to scare the market there. Dozens of percent earnings growth is starting to seem quite normal.
We bears have had to scratch around quite hard to find any sort of nutrition. There’s the shudders from fellow emerging market, Thailand, where a new military government is displaying a quite wonderful contempt for markets. And the Old Lady in London unexpectedly cranked interest rates up 25 basis points – rather to the (short-term) dismay of the share market there. Some oil producers have been messing with the taps and causing the oil price to bob and weave. And one scaremongering scribbler offered the view that China was quite able to put on its own little economic slowdown and that troubled a few commodity markets.
Back home one could get steamed up about a weakening currency. The trouble there however, is that this week the rand has been pretty steady, and secondly we are not sure if the market goes up or down when the currency does the opposite. Judging by the traffic here in Joburg, as well as the JSE turnover, not everyone has settled down to worry about their portfolios yet. Maybe developments next week will give us a true flavour of how strong this New Year bull really feels and how many folk got new cars for Christmas.
Do please remember to devote some time this weekend to exercising your index finger. Despite the mysterious disappearance of some cash and its chief executive (not simultaneously, I hasten to add) the telecoms regulator has found time to instruct us to punch the full ten digits for a local call from Tuesday. I am very puzzled by their claim that this will allow many more telephone numbers to be made available for use by currently unconnected communities. How?
The sight, last weekend, of the Proteas making really heavy weather of saving the series against India was quite painful but I watched in horror a rugby match that was taking place in Nelspruit! In the first week of January? The temperature on the field was not mentioned but big numbers must have been involved, not to mention the humidity. I think one of the sides was a touring team from overseas. I wonder how many of them survived?
Survival is also a factor in the markets. Already this year there have been headlines suggesting the disappearance of some familiar companies from the JSE boards. These private equity fellows are certainly waving their chequebooks these days. I suppose in a few years time the assets will reappear in a different package and at a higher price in some slickly marketed share offer? All rather annoying.
James Greener
12th January 2007
