This week has provided a degree course in volatility. From a 1-month low last Friday the All Share index today soared through to an all time high. Daily ranges of 400 points have been common but not relaxing for the short term traders. Once again I shall invoke my image of a large, energetic and joyful Golden Retriever bursting out of a lake and giving himself a vigorous and luxuriant shake. Water, weed, fur and slobber are widely and generously distributed. Distant bystanders admire the sight but are grateful not to be too close. So it is with this market which is shedding the less tenacious and determined speculators while investors are starting to worry about the smell of wet dog and paw marks on the carpets.
We are in a quiet spell for company reports but even so there are enough trading statements, cautionary announcements and good old fashioned rumours lurking about to keep the blood pumping. The so-called junior miners have been especially excitable. It is a sector that is suitable for only the fit, the nimble and the financially robust.
Away from the market I think the news is pretty bad and ought not to bullish, although of course I am obviously wrong about this. The civil servant’s strike has deteriorated into entrenched positions and increasingly wild and unsupportable claims on either side. Violence has erupted and as always the sick, poor and young are the greatest losers. It is odd that the so-called people’s government is taking such a hard-line stance. And of course, this is the government that never stops passing laws to enforce their own vision of how the rest of us should behave when we employ people.
If the rand’s behaviour is any guide, foreigners too appear not to be concerned with developments in the streets, schools and hospitals. Our money has improved against most other currencies except the pound this week, even as the US dollar itself enjoyed a bit of support too.
Once again, the quarterly futures close-out event has come around and is being used by the cognoscenti as another reason for the bull’s health. Admittedly, the market does frequently peak during a close-out session, as mysterious and shadowy forces gather their gammas before thumping the thetas. Or something like that. It will take place next Thursday which I have already highlighted in the diary because it will be the winter solstice. Even though there will be the odd cold snap still to come, at least the days will begin to lengthen again and summer will be inevitable.
The only reason for having winter that I can see is that it is rugby season and the real stuff begins this weekend with the first Tri-Nations happening down in the shadow of The Mountain. With so much depth of talent to select from, Coach White really didn’t need that chat with President Mbeki about how to wallop the Wallabies.
The Gauteng Department of transport must be an unhappy place these days. Their plans for a monorail have been slapped down and now they have discovered that there is a finite number of ways to arrange three letters and three numbers to make up a GP number plate. The number of cars on the roads, however, is not finite. Fortunately the “user pays” principle can be invoked for this problem and car owners will be invited to spend much of 2008 in queues getting new plates. Can it be true that we will be returning to TJ numbers? I think I still have my old ones.
James Greener
15th June 2007
