Sanlam Namibia Enhanced Cash comment - Sep 06 - Fund Manager Comment09 Nov 2006
During the past quarter the SA Reserve Bank decided to increase the repo rate from 7.50% to 8.00%. This was in line with market expectations.
There are numerous concerns in the market about money supply and private sector credit extension being too high, the negative current account balance and rand weakness feeding through to inflation. During the quarter, the 3 month and 12 month Jibar rates increased from 7.54% to 8.31% and 8.64% to 9.38% respectively.
We expect the money market curve to flatten over the next few months as rates at the short end of the money market increase much faster than at the long end.
Current forward rates in the market suggest that the repo will increase at the next MPC meeting on the 12th of October to 8.5%, while another hike in December is likely.
Our strategy in this market has been to stay short, but slowly increase exposure toward the long end.
Sanlam Namibia Enhanced Cash comment - Jun 06 - Fund Manager Comment07 Aug 2006
The 3 month and 12months Jibar rates started the quarter at 7.09% and 7.36% respectively. Higher than expected M3 and Private Sector Credit Extension figures resulted in some nervousness in the money market during May. The 12 month Jibar rate increased from 7.36% to 7.72%, discounting an increase in the Repo rate. The SA Reserve Bank decided on the 8th of June to increase the Repo rate from 7% to 7.50%. The increase resulted in more volatility with the rand weakening due to the sell off in metal commodities and emerging markets in general. The 3 month and 12 month Jibar rates ended the quarter at 7.54% and 8.59% respectively.
Current forward rates in the market suggest that the Repo rate will increase at the next MPC meeting on the 3rd of August to 8%, whilst another increase could not be ruled out in October. The very steep money market curve at the end of the quarter is further confirmation of this.
Sanlam Namibia Enhanced Cash comment - Mar 06 - Fund Manager Comment23 Jun 2006
On the 2nd of February the SARB decided to keep the Repo rate unchanged at 7%. The 3 month and 1 year JIBAR rates drifted sideways between 7.05% and 7.09% on the 3 months and between 7.20% and 7.40% in the 1 year. Current forward rates in the market suggested that the Repo could stay unchanged at 7% at least for the next 12 months. Money market investors therefore appear to be of the opinion that short term interest rates would drift sideways from current levels.
The money market yield curve at the end of the quarter remained very flat. Money market asset selection and not duration will play an important part in the yield achieved by money market portfolios.
Looking forward the next MPC meeting will take place between the 12th and 13th of April and we expect that the SARB will keep the Repo rate unchanged at 7%.
Sanlam Namibia Enhanced Cash comment - Sep 05 - Fund Manager Comment24 Jan 2006
During the quarter the SARB decided to keep the Repo rate unchanged at 7%. The 3 month NCD's traded in a narrow band between 6.95% and 7.05% while the 12 month rate increased from a low of 7.10% early in August to 7.55% closer to the end of the quarter. The main driver of the longer end were FRA's as expectations of a rate cut in the next few months are less certain.
At the end of the second quarter the money market yield curve became steeper and suggested a stable money market environment at least for the next 12 months. Money market investors therefore appear to be of the opinion that short term interest rates would drift sideways from current levels.
SIM expect money market rates to stabilize at current levels.