In SA the 2 key indicators for the stock market remain positive namely: the 5% decline in prime interest rate since December 2008 is extremely positive as this fuels equity returns as money flows from cash into shares; CRB Metal Index increased 10% over the last quarter, outweighing the rand strength and underpinned the rise in resource shares. The PE on the Financial & Industrial index excluding dual listed shares, indicates that the stock market is on a forward price earnings multiple of 10.2x and a dividend yield of 4.2%. I estimate that the market is pricing in 13.5% long-term equity returns, which is 7% better than cash and 5% better than the R157 government bond. I see scope for the market to move higher over the next 6 months.

The news is negative, however there are significant positive factors namely low oil prices; low interest rates and increased government spending. We think it is shrewd to position oneself for a recovery in stock prices as the probabilities are that conditions will start to improve in the second half of the year. We currently favour domestic cyclical stocks and stalwarts.

The news is virtually consistently negative, however there are significant positive factors namely low oil prices; low interest rates and increased government spending. We think it is shrewd to position oneself for a recovery in stock prices as the probabilities are that conditions will improve in the second half of the year. We currently favour domestic cyclical stocks and stalwarts but will acquire resource shares at the right price.

The news is virtually consistently negative, however there are significant positive factors namely low oil prices; low interest rates and increased government spending. We think it is shrewd to position oneself for a recovery in stock prices, as the probabilities are that conditions will improve in the second half of the year. We currently favour domestic cyclical stocks and stalwarts but will acquire resource shares at the right price.