We believe the Sovereign debt crisis in Europe was finally arrested by the EU/IMF bailout packages, but global growth concerns have escalated and financial market uncertainty may remain in the shorter term. US growth, however, is becoming more self-sustainable; whilst the Chinese economy remains strong to the extent that they have installed policy restrains to contain possible inflation. The European crisis could result in interest rates remaining lower for longer globally. With the local recovery still lagging that of the globe and against the backdrop of a relative strong Rand, we believe the Reserve Bank has the opportunity to cut rates by at least a further 0.50%. This will add to the relief that consumers should start experiencing from lower food prices. Domestic demand should turn positive soon, reviving real growth in the local economy, driven by strong fixed investment and social spend, as well as the strong global demand for commodities. The SA equity market in general is furthermore not expensively priced after the latest pull-back, i.e. we foresee a positive environment for equities. Volatile times like these, when sector rotation direction is unclear, are relative good times for Index Trackers. The Gryphon All Share Tracker Fund, due to its tracker mandate, tends to be fully invested more often than not, and is only slightly tilted to certain sectors and shares, so as to achieve the most efficient replication of the SA All Share Index with an optimum number of shares.

Although the global economic recovery is well on track and local economic conditions are improving, local consumer confidence remains fragile and erratic. With the local recovery still lagging that of the globe and against the backdrop of a relative strong Rand, we believe the Reserve Bank has the opportunity to cut rates by at least a further 50 points in the second quarter of 2010. This will add to the relief that consumers should start experiencing from lower food prices. Domestic demand should turn positive soon, reviving real growth in the local economy, driven by strong fixed investment and social spend, as well as the strong global demand for commodities. The SA equity market in general is furthermore not expensively priced, i.e. we foresee a positive environment for equities. Volatile times like these, when sector rotation direction is unclear, are relative good times for Index Trackers. The Gryphon All Share Tracker Fund, due to its tracker mandate, tends to be fully invested more often than not, and is only slightly tilted to certain sectors and shares, so as to achieve the most efficient replication of the SA All Share Index with an optimum number of shares.