Equity markets enjoyed their best monthly gain so far this year with the MSCI $ World Index rising 5.1% in November. The gains followed the Republican victory in the US elections, a result that reassured those investors who had sold equities on fears of a repeat of the turmoil surrounding the disputed 2000 elections. The other main focus over the month was a slide in oil prices and weakness in the US dollar on investor fears the US authorities were tacitly encouraging a weaker dollar.

In terms of regional performance, currency gains were an important factor with the weakening dollar leading to some strong non-US performance figures when measured in US $ terms. The best performing major region over the month was the Emerging Markets which rose 9.2%, closely followed by Asia Pacific which gained 8.5%. Given the weakness of the dollar, the US was unsurprisingly the worst performing major region with a gain of 3.9%. In local currency terms, Japan was the weakest performer, up 1.5% in yen, over the month.

In the foreign exchange markets, the US dollar weakness continued over the month, with the currency falling 4.5% versus both the euro and the Swiss Franc, 4.3% against sterling, 3.2% against the yen and 5.8% versus the rand.

Against this mixed backdrop, the Absa International Fund outperformed its benchmark, the rand adjusted MSCI World Index, rising 0.6% versus a drop of 0.8%.

Whilst bonds have performed better than we expected this year, the equity market is shaping up in line with our expectations. Earnings growth will be over 20% on a global basis and this has underpinned the market as valuations have fallen. Next year will be tougher but our median expectation is still for more equity outperformance.

Equity markets remained volatile but the MSCI $ World Index closed the month with a solid gain of 1.8%. Once again, the relentless rise in oil prices to record levels dominated the investment scene with investors concerned over the impact the higher prices would have on global economic growth. A strong performance by the IT hardware and Resource sectors ensured global equity markets enjoyed solid gains over the month. However, the rally lost some momentum towards the end of September as oil prices reached record highs on the back of concerns over the impact of several hurricanes in the Gulf of Mexico and on the increasing unrest in Nigeria. US economic data remained weak with evidence increasingly pointing to a soft landing. On the monetary front the US Federal Reserve raised interest rates in line with forecasts by 25 basis points to 1.75% but the Bank of England and the European Central Bank both left rates unchanged in their respective regions. On the economic front, data was largely disappointing, although second quarter US GDP growth estimates were revised higher. At the start of the month, the Chicago Purchasing Managers' Survey came in weaker than expected, falling to 57.3 in August, from July's 64.7, indicating a slowdown in activity in the manufacturing sector. Elsewhere, core inflation in the US was lower than expected for the third consecutive month as higher oil prices depressed core inflation by reducing consumer's real incomes and consequently spending. In the markets, interest rate futures were lower, and indicated a further quarter-point rate rise by the end of the year was virtually fully priced in. We have adopted an overweight stance in equity this year against a background of strong growth in corporate profits and a robust economic outlook. Over the next two quarters the markets will be able to look forward to 2006, with the US presidential election behind it and hopefully with some clarity on the outlook for oil. Whilst the outlook may be a little unclear and markets stuck in a range at present, we remain cautiously optimistic towards equities given our view that the economies will remain robust, even with a higher oil price.

Global equities recovered from July's sharp sell-off and closed the month with a slight gain. Trading was extremely volatile in August with gyrations in the oil price and the worsening security situation in Iraq unsettling investors. However, equities rallied towards the end of the month as investors looked through the short term impact of these events. Extremely low trading volumes also exacerbated the volatility over the month as US investors largely sat the sidelines ahead of the Republican Party Conference in New York at the end of August. Continental Europe was the weakest performer with a loss of 0.3% in US $ terms. Against this mixed backdrop, the ABSA International Fund outperformed its benchmark, the Rand adjusted MSCI World Index, rising 7.2% versus a gain of 6.4%. US economic data remained weak on the whole with some economists beginning to scale back their expectation of future aggressive rate rises. On the monetary front the US Federal Reserve and the Bank of England both raised interest rates in their respective regions but the European Central Bank left euro-zone rates unchanged. Euro-zone interest rates were kept unchanged at 2.0% by the European Central Bank as fears of slowing growth and rising unemployment outweighed the risks of rising inflation. Later in the month, the US Federal Reserve raised US rates by a 25bp to 1.5%, in line with expectations. In its accompanying statement, the Fed argued that the recent growth slowdown reflected higher oil prices and would be temporary. Oil prices reached record levels in August on the back of the ongoing uncertainty regarding Russian oil company Yukos situation and further instability in Iraq. Global equity started the month on a weak note on terrorism concerns and as the price of crude oil surged. A fall in the oil price towards the end of the month encouraged investors to look beyond the short term impact however and the MSCI $ World Index posted a small gain for August. We remain positive on the market: Profits are at new peaks; valuations are at five year lows; and balance sheets are strong with cash reserves at all time highs. We continue to look for opportunities to add value in the period ahead by acquiring blue chip growth companies at reasonable valuations.

Ideal for investors who want to diversify their investment to include international exposure, who require an investment, which not only has the potential of capital appreciation over the medium to long-term, but also includes hedging against the depreciating Rand. Fund Manager Comment Global equities were weaker for a second consecutive month despite a largely positive US earnings season. The deteriorating political situation in the Middle East and fears of Chinese monetary policy tightening combined to hit investor sentiment over the month. The MSCI $ World Index fell 2.2% in April, its worst monthly performance since January2003. The Emerging Markets suffered the biggest fall, losing 8.5% in US$ terms on fears that demand from China may dry up. The best performing major region was the UK which fell 0.9% in US $ terms. Against this backdrop, the ABSA International Fund under performed its benchmark; the Rand adjusted MSCI World Index, rising 6.4% versus again of 7.8%. In the currency markets, the US dollar strengthened versus a basket of currencies as the threat of a US interest rate rise increased. The dollar climbed 6% versus the Japanese yen, 2% versus the euro, 3.5% against sterling and 10% against the South African Rand. March was an extremely strong month for the US economy with better than expected employment figures and signs that inflation may be picking up. Elsewhere, China reiterated its focus on stability in the economy, raising fears that the authorities were about to put the brakes on the recent strong economic growth? In the equity market, the change in expectations has had a predictable effect on sector performance. Interest rate sensitive such as Financials and IT have lagged whilst Drugs and Tobacco have rallied. We expect the Fed to be consistent with its recent statements and can foresee only a gradual increase in interest rates this year. As we have seen in the UK, where, short rates have already risen by 75bp, this need not have a damaging effect on the economy. Therefore the sector rotation seen to date could be short lived. With such strong economic data coming through and companies reporting profits generally ahead of expectations, we see further upside potential for equities as the markets become accustomed to the new rate rising environment. The ABSA International Fund is well positioned to take advantage of any such upside in the markets.

Continental Europe was the best performing major region with a gain of 8.6% in US $ terms. The US was the worst performer, rising 5%. Currency returns played a big part in Europe's relative outperformance with the euro strengthening 5% versus the US $ over the period. In local currency terms, the UK and Europe were actually among the worst performers in December. Against this backdrop, the ABSA International Fund underperformed its benchmark, the Rand adjusted MSCI World Index, rising 9.8% versus a gain of 10.5%. In the equity markets, US equities rose to 21-month highs as investors welcomed the mainly positive economic data, and the Dow Jones Industrial average closed above the psychologically important 10,000 level for the first time in 18 months. Investors initially welcomed the capture of Saddam Hussein on December 14 th with a rally which sent stocks to fresh highs early in the session, but investors spotted a chance to lock in profits, and sent all three major indices lower by the close of play on the 15 th . Equities subsequently recovered later in the month though as economic data picked up. On balance, however, we remain cautiously optimistic on equity markets for 2004.