Hellfroth swamps markets

On Monday, the market value of the Johannesburg bourse contracted by 7%, equal to some R300bn.

The market value of the Johannesburg bourse contracted by some R300bn on Monday, as the JSE all share index fell more than 7%, in the wake of hellfroth selling swamping global credit, equity, commodity and currency markets. The Johannesburg equities market has now fallen 37% from its highs, seen earlier this year, compared to falls of 30% for the New York-based Dow Jones Industrial Index, arguably the most influential stock barometer in the world. On Monday, the price of each of the 30 components of the Dow were falling as the JSE closed for business.

The dollar was in strong demand on Monday as investors rushed for the currency as a safe haven; despite the US’s woes, its currency is now seen as one of the best bets in global markets increasingly beset by uncertainties. At the close of trade on Monday, the rand was nearing six-year lows, at R9 to the dollar. Very little was rising on the day, apart from the dollar, and dollar gold bullion, which usually move in opposite directions. Listed gold stocks were, however, sold off as investors continued to liquidate their positions broadly across equity markets.

Commodities, and listed miners, now widely considered as speculative, have suffered some of the biggest falls in the sell off. Some of the biggest falls contributing to the JSE’s fall on Monday included BHP Billiton (JSE:BIL), the market’s most valuable stock, down 9%; Anglo American (JSE:AGL), down 11%; Sasol (JSE:SOL), also down 10%; Anglo Platinum, down 13%; Exxaro, down 18%, and ArcelorMittal, down 26%. However, there was also material selling beyond resources, with Standard Bank marked down 10%; MTN was down by 6%; Naspers by 8%, FirstRand by 8%, and Murray & Roberts by 8%.   

Earlier on Monday, massive floodgates were opened by central banks across the Asian region. But investors fretted over an ambivalent European response to the global financial crisis, over the weekend, and were selling in every direction. Investors also continued to doubt that a $700bn bank bailout for the US, approved on Friday, had gone far enough. Monday saw particularly vicious sell offs in Russian and Brazilian equity markets.

As for the way forward, analysts at the Bank Credit Analyst have warned that “markets will remain at risk”, even after the TARP (Troubled Asset Relief Program) was passed by the US Congress on Friday. While the $700bn package was seen as possibly providing a lift to markets, BCA Research said that “this may prove temporary if not followed up with other measures needed to restore order to global credit markets, including suspension of mark-to-market accounting. Our fear is that policymakers, including many central banks, still do not fully grasp the challenges facing the financial system.

“Governments must effectively guarantee the banking system on both the asset and liability side, and provide more relief to homeowners. Coordinated rate cuts are also necessary to stem the economic damage already evident in the latest purchasing managers’ surveys in the US and Europe. In the end, policymakers will do what is needed; the unknown is whether even more market rioting is first needed. Bottom line: Passing the US TARP is a big positive, but may not be sufficient to break the logjam in global credit markets”.

STOCK MARKET INDICES

 

 

 

From

From

 

 

high*

low*

MSCI World

1139

-32.5%

0.2%

Emerging world

607

-28.9%

0.0%

 

 

 

 

Dow Jones Industrial Index

9879

-30.4%

1.4%

S&P 500

1047

-33.6%

1.9%

MSCI USA

1040

-30.3%

0.1%

MSCI Japan

658

-38.5%

0.1%

MSCI Germany

96

-31.9%

2.9%

MSCI China

46

-56.6%

13.9%

China (Shanghai)

2174

-64.5%

20.6%

UK (FTSE 100)

4633

-31.4%

1.8%

MSCI France

108

-30.7%

5.7%

MSCI Italy

74

-37.7%

3.7%

MSCI Spain

131

-28.0%

8.9%

Toronto (S+P)

10131

-33.1%

5.3%

Brazil (Bovespa)

37814

-48.8%

0.0%

MSCI Russia

546

-66.9%

0.5%

MSCI India

494

-45.0%

2.2%

MSCI Korea

391

-30.7%

4.0%

MSCI Mexico

4369

-35.5%

1.9%

Australia (S+P)

4540

-33.7%

0.6%

MSCI Netherlands

76

-34.3%

11.4%

MSCI Turkey

524576

-43.5%

12.0%

MSCI Belgium

55

-51.6%

16.8%

MSCI Sweden

5945

-41.2%

3.6%

MSCI Indonesia

2493

-39.1%

16.9%

MSCI Poland

1634

-39.1%

5.8%

MSCI Switzerland

899

-26.1%

7.8%

MSCI Norway

2034

-41.9%

9.7%

MSCI Austria

166

-47.1%

9.1%

MSCI Greece

86

-42.9%

3.1%

MSCI Denmark

3110

-29.0%

6.6%

JSE South Africa

21097

-36.7%

0.6%

MSCI Argentina

2113

-49.7%

1.5%

MSCI Ireland

47

-56.2%

31.8%

MSCI Finland

105

-47.9%

4.5%

MSCI Thailand

245

-37.3%

6.3%

MSCI Portugal

68

-44.8%

1.4%

MSCI Hong Kong

7844

-46.9%

1.4%

MSCI Singapore

1320

-41.0%

3.0%

MSCI Taiwan

212

-45.2%

0.0%

MSCI Malaysia

373

-35.3%

6.3%

MSCI Czech

898

-27.5%

3.0%

MSCI Colombia

552

-25.6%

19.8%

MSCI New Zealand

90

-36.5%

4.8%

* 12-month

 

 

 

 

 

COMMENTS   11

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Comments on this article are closed.

it is what it is

But nothing was said about that anyway the COPS re taking no prisoners everything is in for a short back and sides.Gold will come out shortly and show the way as I have said before you don’t need water wings get in the water is just fine.

The meldown is going to be absolutely frightening.

What does this word mean, even if you are using it metaphorically ?

of zot africa.

Hellfroth is watching a 7% drop in a local stockmarket that is going to vaporise a hell of a lot of peoples savings, futures, small business ventures, housing mortgages, and virtually any form of normal financial activity. But be not concerend dear reader as your local ‘financial advisor’ will keep on saying ‘Don’t go into cash, you have to be ready for THE MARKET TO TURN” Yeah, turn off the bottom of the bloody page.

That’s Hellfroth!

I warned you guys, I wont take any bollie from any racists. This is my revenge for not recognising my superior position.

Yes, the ANC control all the markets in the world as well as all credit practices…

yeah the ANC engineered a global financial crisis from their HQ at luthuli house. grow up guy.

I’m afraid it’s people like you who give racists a bad name… umm, give whites a racist name… or something like that anyway; combination of the two maybe? Anyway, clearly you can’t see further than the inside of your thick skull. The ANC may or may not be thugs, SA may or may not be a banana republic… but assuming your statement is seriously intended, it’s clear that thugs governing a banana republic would do a better job than you would.

x

End of comments.

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