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Bombings affect market

09 September 2004 Angelo Coppola

Local equity markets closed higher (+0.62%) yesterday with retail and bank shares making the most of the day.

Nico Kelder, economist at Efficient Group reports that itt does not seem that the Jakarta bombing yesterday had a significant effect on local trading. Against the majors the currency weakened for the day, shedding 0.8$ against the sterling. Bond yields strengthened 10 points.

Platinum moved below the $830 level closing at $827.50, gold was slightly lower. Oil regained almost $2 to close $42.22 per barrel of Brent, most likely a reaction to the bombings.

European markets closed in the red yesterday as negative earnings reports as well as the Jakarta car bombing took markets of their two month highs.

In the US markets were mixed. The Dow Jones closed lower with rising oil prices and disappointing wholesale report having a negative impact. The Nasdaq rose 1%. This morning the Far East is trading lower with the Nikkei weaker by -1.43% and the Hang Seng by -0.55% so far.

We expect local equities to be under pressure from profit taking and in general a quiet market is expected as usual on a Friday.

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QUESTION

The second draft amendments to Regulation 28 will allow retirement funds to allocate up to 45% of their assets to SA infrastructure, with a further 10% for rest of Africa; but the equity & offshore caps remain unchanged. What are your thoughts on the proposal?

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Infrastructure? You mean cash returns with higher risk!?!
Infrastructure cap is way too high
Offshore limit still needs to be raised
Who cares… Reg 28 does not apply to discretionary savings
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