CNBC Africa Markets Report
Tue, 08 Jul 2008 16:53Janice Du Preez
US stocks opened mixed after futures pointed to a lower open. This came after Ben Bernanke’s comments that the Federal Reserve may extend emergency lending to large investment banks. The dollar made some significant gains as positive sentiment was restored to the market and falling oil prices added to the equities’ gains. European markets had earlier been stuck in negative territory with the banks weighing heavily on markets. On the local bourse, the All-Share Index was trading half a percent lower by late afternoon.
The banks were leading the gainers list, trading more than two percent higher. The Deputy Governor of the Reserve Bank today reiterated that the local banks are largely unaffected by the US credit crisis, with an adequate regulatory and capital environment. FirstRand was trading close to four percent higher, with Investec Plc at the other end of the spectrum, trading close to two percent in the red.
The platinum miners were down one percent, while gold mining was down more than a quarter percent in afternoon trade. With the dollar making somewhat of a comeback again today, the prices of the underlying precious metals came under pressure. In this reactionary market, the negative correlation between the dollar and the price of gold is more distinct. Platinum prices seem to be governed more by supply and demand issues, with the slowing demand from the automotive industry placing additional pressure on the price. The price was earlier supported by concerns about output from South Africa as power shortages remain a major concern. AngloPlat was down more than four and a quarter percent.
The general retailers were down more than one and a half percent. Moody’s Investor Services today noted that the country may be heading for a recession by year end as consumer spending is under a severe strain. A falling housing and vehicle market, as well as lower business and consumer confidence, are cited as support for this sentiment. South Africa’s largest clothing retailer, Truworths, price target was cut at UBS AG earlier today.
