STANLIB's Weekly Focus 25 February 2008
EXECUTIVE SUMMARY OF STANLIB’s WEEKLY FOCUS
SPARKS FLYING
* Last week was a cracker-jack week, with the copper price rising 7% to the highest price since May 2006. It is up 25% in dollar terms so far in 2008 (41% in rand terms). This is great for a number of our mining companies, notably Anglo, Billiton and Metorex.
* Aluminum rose 2% last week (up 38% so far in 2008 in rand terms), platinum rose 4% (up 61% in rand terms in 2008), palladium rose 18% last week (also up 61% so far this year) and rhodium is soaring too. The rand gold price rose 5% too.
* Not surprisingly the STANLIB Resources Fund hit an all-time record high and is now up 12% in 2008.
* The JSE All Share Index is up a phenomenal 20% in the past month, with Anglo American up 50% in one month, Billiton is up 40% and Sasol 33%, also at a new record high.
* However, the Financial & Industrial Index is only up 6.6% during this period and offers the best value for investors.
ECONOMIC UPDATE
* In his budget speech Minister Manuel maintained the focus on fiscal discipline. He continued to expand social grants (now reaching over 12 million people a month) as well as improving infrastructural delivery.
* The budget surplus is a safeguard against economic disappointment and the move to prudential offshore limits for pension funds and unit trusts is encouraging, although it may keep pressure on the rand.
* The funding of Eskom needs to be applauded for its innovation and the 1% cut in the corporate tax rate to 28% is encouraging.
* Governments finances remain in excellent shape and our offshore borrowings are very low.
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