Nedbank daily report

An extract from Nedbank (South Africa) Capital’s daily report: Wall Street Equity markets rebounded Tuesday, as a sharp drop in the oil price eased worries about inflation and consumer spending, lifting airline and retail stocks. Financials rebounded on optimism that an end to the credit crisis may be nearing following Merrill Lynch’s latest write-down and share sale. In addition, financials were boosted by expectations that regulators would extend an emergency rule banning naked short-selling in 19 companies, including Fannie Mae, Freddie Mac, Citigroup, Goldman Sachs and Merrill Lynch. Better than expected quarterly results added to gains on Wall Street, but energy stocks emulated the declining oil price. The Dow Jones Industrial Average surged 2.39% to end the day at 11,397.56, while the Nasdaq Composite Index rose 2.45% to close at 2,319.62. Local The rand strengthened dramatically against major currencies Tuesday, despite dollar gains, with traders saying investors are looking to buy into higher yielding assets amid uncertain global financial markets. This year so far the trend has been to rand depreciation- the ANC’s conference made investors nervous and heightened political uncertainty; widespread power shortages weighed on the economy; global economic activity slowed and a build up in inflationary pressures weighed on economic activity. However, expectations for further interest rate hikes have recently had a positive impact on the rand. The rand’s outlook depends on continued investor demand for high yielding currencies, but the rand’s underlying factors remain negative and the rand’s gains in the short-term could be limited by profit taking and importer demand. Oil is at $122.06/barrel and gold has fallen to $916.35/oz.

cfaBANANA- where are you from?

South Africa - Cape Town