Wednesday, December 19, 2007
Political strife ’not cause of JSE jitters’
THE local stock market’s nasty drop yesterday morning, which had the JSE all share index down more than 2% in intraday trade, raised concerns that political events were souring the financial climate, but analysts felt the outcome of the African National Congress conference had already been priced in.
“I think the political events have been priced in for some time,” chief investment officer at Cannon Asset Managers Adrian Saville said. “The weak markets of Friday, after our close, and yesterday had to be brought in.”
This meant yesterday’s disastrous drops had more to do with global financial woes. On Monday, European, US and UK stock markets fell heavily over concerns about a slowdown in the US economy. Yesterday this caused copper prices to be chopped to a nine-month low while aluminium hit a nine-week low — both events hurt the stock prices of large-scale producers of these metals, Anglo American and BHP Billiton.
NVDL: Maybe. Not sure if I buy this. I think the market here would have us believe there is no connection, because everyone would like to believe Zuma won't be bad for business. Obviously there is some connection, and jeepers, the JSE has nosedived to 27830. A few days ago the JSE was edging 31 000. I guess time will tell, but whatever Zuma does, I'd predict the markets to start coming to grips with the inflationary/recessionary effects stemming from the motoring mad USA.