[2007-08-09]  Stock Market Hit 2007 Second Half By
The upward trajectory of the stock market continued into the second half of 2007 as market indices continued to hit new record highs.

A market analyst for Capital Securities, Leutlwetse Tumelo said due to new upward trends, the Stock Exchange changed the methodology for calculating the market indices on the 20th April this year, from a simple market-cap weighted calculation to a volume Adjusted market-cap weighted calculation. The result of this change, according to him, has been a smoother and slower rate of change for the indices.


He said the star performer for the quarter was Imara as it led all advancers with a gain of 173 percent. "This was on the back of an announcement by the company that it expected to report exceptionally better results than those indicated in the listing prospectus for the year ended 30 April 2007. Discovery Metals and Lionore followed with gains of 76 percent and 52 percent respectively. The other advancers to close the top 5 were FNBB and Stanchart with gains of 49 percent and 46 percent respectively," said Tumelo.

On the other hand, he said, Ellerine fared the worst for the quarter dropping 14 percent in value. MRIB and Iamgold followed shedding 9 percent and 8 percent respectively. Barclays and A-Cap rounded off the biggest decliners with decreases of 4 percent and 1 percent respectively. On a 12 month review the biggest gainer was Imara, which more than quintupled with a gain of 567 percent. The other top gainers over a 12 month period were Lionore at 432 percent, Letshego at 180 percent, FNBB at 168 percent, and Stanchart at 162 percent. Trading activity for the quarter saw total value traded at P307.5 million on 45.9 million shares.

On the outlook of the market, Tumelo said the bull market that began in January 2005 is well into its 30th month and not showing any signs of slowing down. "Half year reporting season is now on with expectations of stellar corporate earnings. With earnings delivery remaining resilient, and the business conditions in the economy favourable, the majority of stocks across the board remain attractive," he said.

In the short-term, domestic inflation is expected to hold steady and remain within the Central Bank's annual inflation target. Credit growth, already above the Central Bank's target range, is expected to increase as the appetite for credit is stoked by the 50 basis point Bank Rate reduction in June. The outlook is positive for business activity and we expect this to be reflected in healthy corporate profits.



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Source: Copyright © 2007 The Voice.