January 29, 2010 in Uncategorized
Jozi, Jozi. Earnings pushed us higher, but poor US economic data saw us nowhere for a while and then lower. Session end the Jozi all share closed near the worst part of the day, down nearly seven points to 26795. Resources down 1.3 percent the big laggards, in the winning column were the banks, up nearly 1.9 percent.
A production update from the fellows at Lonmin was hardly inspiring. I noted that all the explorers and smaller platinum producers all had a hog wild day, up sharply. The majors, not so great, I saw a downgrade for Impala yesterday, which was up comfortably and then closed much lower. OK, but back to Lonmin, the perpetual miss fellows on production, not all fair, that plagues most in the sector.
109,044 ounces were produced in the fourth quarter, sounds like a bit of a poor quarter to me, bearing in mind that the company reckons that they will get to 700 thousand ounces for the year. If I hear you scratch your head don’t worry, the reason why they could reach that last quarter was a problem with one of their furnaces. I have heard folks in our space laugh and say that their furnaces are held together with sticky tape. Right.
Exxaro yesterday with an announcement that they were going to export only around 60 percent of their Richards Bay capacity as a direct result of Transnet shortfalls. OK, so another long string of what Transnet are costing the country, instead of talking about nationalisation, why don’t we talk about fixing the capacity inside of the parastatal companies. Of which none are efficient. None. Let alone profitable. A complete waste of tax payers money in what looks like a jobs over efficiency.
I saw on ENews last night that they were in possession of an ANC Youth League document which was on nationalisation, not only of the mines, but also of financial institutions. I was listening with half of a bad ear, but it seemed that the suggestion was that no compensation would be paid for such stakes in the businesses.
Right. So I went to the ANCYL website to try and find such a document (which looked a little thin in substance as per the TV) and was greeted with smiling faces of the Youth. Or not really that youthful, I think age has to be under thirty five to be a member, at which time you are no longer youthful.
I laughed when I saw an Old Mutual savings advert, served via Google ads. The reason for the laugh is because if the ANCYL suggest no compensation for these stakes, then the value of the stakes inside of the Old Mutual savings mechanisms will be badly hurt, not so?
Ben Bernanke is back. Not overwhelmingly, but he secured the necessary congressional votes to have another term as the head of the Federal Reserve, 70 yeses and 30 nos. The closest vote since Volker was re-elected back in 1983 with a 83-17 count. And the most unpopular
The part that always fascinates me, and I was incensed yesterday (as I said previously, takes a lot) by some folks pointing out this and that and the past, and what you did there, and what you didn’t do, is that everyone is looking to correct the mistakes we made.
Rather, and of course this is not easy, rather than what potentially lies around the corner. I have heard people say this and that about what should have been done with Lehman, Bear Stearns, AIG, but have you heard one politician get really, really, really upset with each other about the state of US debt. Or perhaps I am not paying attention. Who cares what happened? It happened. Learn from it, ensure that it does not happen again. Don’t score cheap political points off the events.
What this slimmest of margins means however for Bernanke however is that lawmakers are placing increasing pressures on the Fed’s independence. I suspect that laws need changing when times change, and perhaps there were fellows who fell asleep at the wheel. Don’t know.
The total number of recalled vehicles by Toyota over the last three months, four million. Ouch. Apparently it has to do pedals, some getting stuck half way through, some getting just plain stuck. Here is the official press release. As you can imagine, that is not great if you are cruising down the highway. The top brass have been critical of the grow at all costs type strategy, that Toyota embarked on to become the number one seller globally.
Unfortunately some of the parts and weak factory practice have led to the quality of the worlds most reliable brand fall away. The closing of some of the factories in the US are costing the company 1.1 billion US Dollars. The last five trading sessions the stock is down 13 percent. Yech. Where there are losers, there are winners, Hyundai is the US are letting Toyota drivers trade their vehicles in, plus they get a thousand bucks if they buy a Hyundai. Cool.
I must admit, I have only ever owned VW’s and Hyundai’s, never had a problem with any of those. My dad has had his Toyota for donkeys years and he has never had a problem with it, in fact it goes like a dream. Perhaps that has something to do with the fact that he drives slower than most. And as such has passed that slow driving onto me. Finally, for Toyota it will mean repairing the brand, that will take who knows how long. If you do a Google search you will see that even rental company have sidelined their Toyota’s.
And then I had to admire the way that some businesses embrace technology and deal with the new issues. Check out the Toyota twitter page. There are dedicated folks in the US answering questions from desperate owners, and if you read all the posts you can see that they are fighting a battle here. Hyundai’s twitter page reveals a much more cheerful approach. GM, Ford, Chrysler, VW, they are all there.
New York, New York. Sis. All fall down. Poor initial claims numbers that were lower than expectations and some durable goods orders that were also below analyst estimates all lead to folks increasing their bearish tone. Again the materials sector under pressure. Transport and tech stocks under pressure. A massive jump from Nokia after releasing results comfortably above estimates. Up over eight percent in normal trade. Still question marks remain about their ability to keep pace with the smartphone market worldwide, but they are making progress with their Ovi platform.
Session end the Dow closed down 115 points to 10120, the nerds of NASDAQ down 42 to 2179 whilst the broader market S&P 500 dropped nearly 13 points to 1084. After hours Microsoft blew away expectations. Blasted them. After hours they are flat. So folks perhaps digging deeper into the prospects column. Stock not expensive, nor is it cheap. Analysts expect the company to make around 210 US cents for the full year, that sticks them on a forward multiple of 13 times, looking cheaper. Average target price, 35 bucks, that is around twenty percent above where they are trading now.
The oil price is trading at 73.98, higher on the session, but has had a bad time over the last two weeks. The gold price is trading lower at 1084 Dollars per fine ounce, the usual suspects calling a bubble in the gold price, who knows. Do I care, sort of, it is good for the country to have higher gold prices. The copper price is higher at 311 US Dollars per pound, took a whack yesterday. More than ten percent below the recent highs now, most of the commodity complex is about the same. The platinum price is higher at 1515 Dollars per fine ounce.
Nope, lower to start again. All about those GDP numbers out of the US later today.