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Company Listing: STANLIB Wealth Management Limited »

Stock markets around the world: awakening from their slumber, the bull is coming alive and is beginning what may turn out to be a steady trundle…the traditional year-end rally may well have begun - somewhat early this time! (70% probability). · As we have been saying for some time, once the US stops hiking interest rates AND there is some reasonable confidence that inflation in the US could be turning down, a mighty stock market rally would ensue in the US. · We believe this has begun…of course there are always risks to a view and there are some powerful characters around the world who would disagree with this view. · Could inflation still pose problems in the US? Yes, it could do and this is one of the risks to the view. Terrorism is another risk, oil etc, global economic slowdown causing demand for commodities to slacken. These are all risks. There always will be risks. · However, our job is to take views and to respond to the ever-changing environment out there. News out this week and offshore markets’ response thereto indicates a change in sentiment. · Our SA market is being swept up in the bullish mood that is taking hold offshore. So our market is rising as a result of the turnaround offshore. · AND global bond markets…or at least those in the big developed markets, have also begun to rally, breaking their downtrends of the past 6 months, in anticipation of inflation turning down. · Hence not only is our mighty share bull market of the past 3-plus years still intact, but it appears that a new all-time record high is a firm possibility in the near-term, especially with our biggest share, Anglo American (currently enjoying one of its sweetest spots ever) soaring to yet another all-time record high today (up R7 per share at time of writing) and its subsidiary Anglo Platinum soaring to yet another record high of R800 per share (from R200 at the beginning of last year, 2005). · Because even despite the fact that our interest rate cycle has turned upwards, perhaps another 1% hike in rates (ie making 2% in total) is actually modest enough not to affect this economy that much and the markets that much ESPECIALLY as we have such a long history of huge hikes in interest rates. · And…our economy has lots to look forward to this time round with all the massive capital expenditure planned, which should help counteract a slowdown in our consumer spending. · We particularly like the fact that our country is under big pressure to ready itself for the 2010 Soccer World Cup, because it is when one is under big pressure to produce that the goods are delivered. There is no such thing as “More is maar nog ‘n dag”. Dit moet nou gedoen word. · What about the US slowing down so sharply that within 6 months it is in recession? Yes, that is another risk, perhaps a 30% probability at this stage. That would end a stock market rally very quickly. · But one does have some confidence in the management, ie in the Federal Reserve/Bernanke to start lowering interest rates where appropriate to avoid such an event. They could even start doing that within the next 6 months, lowering interest rates.