LOCAL MARKET INDICATORS
POSITIVE FOR QUARTER 1
The JSE's 4.9% return (excluding dividends) on the All-Share index for the
first three months of 2012 was held back by disappointing performances among
heavyweight Resources shares. They just couldn't get enough momentum going, and
fell 9% in March after indications that demand for raw materials from major
manufacturers and value-adders like China was not going to sky-rocket just yet.
Looking at the major local stock sectors, banking shares helped propel
Financials to a quarterly gain of almost 12%, Industrials managed almost 9.5%,
while Resources fell 4.4% overall.
Nevertheless, precious metal prices nevertheless did well over the first three
months of the year, with Gold bullion up US$109 (7%), and Platinum up all of
17% so far this year (US$244 per ounce). Motorists bracing for another horrid
increase in fuel costs from Wednesday night may not be surprised to hear that
crude oil prices remain stubbornly high, with benchmark North Sea Brent futures
up almost 15% so far this year.
The Rand weakened against major world currencies during March, but its position
at the quarter-end shows a comfortable improvement from the position at the
start of the year. Overall, the Rand is more than 5% firmer against the US
Dollar so far this year, and 2.3% stronger against both the British Pound, and
the Euro.
Internationally, bonds have underperformed against equities, as investors move
funds from the perceived safety of select national and commercial loan
instruments into risk assets such as stocks and shares. Locally, when all was
said and shouted about, the yield on the benchmark R157 SA government bond was
just 3 basis points firmer after the first three months of 2012.
INTERNATIONAL STOCK MARKETS - FIRST QUARTER 2012
Although March saw some tempering of the bullish sentiment of the first two
months of the year, the major international stock markets that we watch
regularly were able to reflect on a positive quarter - handsomely positive for
several of them.
Although this continues the momentum of the last quarter of 2011, we need to
remember that last year overall was one that equity market investors around the
world would really rather write off to experience.
For now, we can at least celebrate the best opening quarter in some years for
most of the major stock indices - indeed the best start since 1988 for the
Tokyo Nikkei which was effectively in the doldrums for much of the nineties and
noughties.
All in round terms, and again excluding dividends: the Nikkei225 index put on
well over 19% in Quarter 1 of 2012, though it's still only 3% up from a year
ago. By contrast, Hong Kong's Hang Seng is up 11.5% for the first quarter,
having given back more than 5% in March.
In the US, the blue-chip Dow Jones is up 8% after three months of 2012, the
broader S&P500 index a good-looking 12%, and the techstock-driven Nasdaq is
up more than 18.5% so far this year.
Significantly disparate early returns from the major Euro-bourses are
indicative of the uncertainties and differing sentiments in various parts of
that region. The Xetra Dax in Germany shows a near-18% rally so far this year,
while London's FTSE100 has managed just 3.5%. Paris comes somewhere in-between,
with the CAC40 up 8.4% for 2012 to date.
