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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG -- Ignore unavailable to you. Want to Upgrade?

To: Andrew who wrote (1126)	12/6/2003 10:21:28 PM
From: Wade	Read Replies (1) \| Respond to of 48092

Only if Rand pulls back<VBG>. The S. A. golds rally depends on the timing when the currency speculators leave. Now. Is Rand begging for Soros' mercy yet?<VBG> Wade

To: Andrew who wrote (1126)	12/7/2003 12:54:55 PM
From: Wade	Read Replies (2) \| Respond to of 48092

This is at least an encouraging news for me to hold my S. A. Golds. Wade businessday.co.za Nov 21 2003 07:45:15:000AM Nasreen Seria Business Day 1st Edition No quick-fix remedy for strong rand' -------------------------------------------------------------------------------- Currency may strengthen in short term Economics Correspondent LIFTING the remaining exchange controls that limit South African investment abroad may result in a further appreciation of the rand in the short term, according to Merrill Lynch economist Nazmeera Moola. This counters the argument put forward by numerous market analysts and business leaders for government to remove all of the remaining exchange controls to allow the rand to weaken and to reduce the volatility in the currency. Moola said in a research note yesterday that the lags between exchange control liberalisation and currency depreciation were "unpredictable and looser controls have typically tended to lead to more currency volatility, not less". She said that when the financial rand system of exchange controls was abandoned in March 1995, foreign capital continued to flow into the country, "contrary to many analysts' predictions". "Other countries that have liberalised exchange control regimes notably Japan in the 1970s and Australia, France and Italy in the 1980s have all tended to experience an initial strengthening in their currencies following capital account liberalisation," she said. Lifting exchange controls is one of the policy options that will be discussed by a task team set up by government and business, which is looking at ways to stabilise the rand. However, Moola shows that the volatility in the rand-dollar exchange rate increased substantially from the late 1990s, when government started relaxing exchange controls. "(While) a case may be made that exchange control relaxation will lead to a weaker rand over a period of several years, there is little evidence to support the theory that exchange control liberalisation will reduce volatility. In fact, the opposite appears to be true," she said. Another option mooted by analysts and exporters for inducing a weaker rand, namely cutting interest rates more aggressively, may also not do the trick. Research by Absa's chief market strategist, Matthys Strauss, shows that the rand's appreciation this year had more to do with the currency being a commodity-based currency, rather than being driven by SA's relatively high interest rates. Relatively high domestic interest rates compared with rates in the US had driven foreign investors to safe- haven emerging markets, such as SA, which lifted the rand last year. However, there had been a clear shift during last year and this year, with SA's status as a commoditybased economy being the more dominant reason for the rand's strength. This would explain why this year's easing of monetary policy, which saw the Reserve Bank cut interest rates five percentage points, had failed to induce any weakness in the rand. Indeed, the rand's strength had dramatically improved the inflation outlook, allowing the Bank to already meet its inflation target and paving the way for another interest rate cut next month. "Although SA is and will continue to be an emerging market, it seems that the immediate future of the rand will be determined more by the international attractiveness of commodity-based currencies. Currently, the upward trend in the commodity price cycle also tends to override any domestic developments in SA," said Strauss. However, the possibility of rising interest rates in the US could result in a weaker rand, despite the fundamental factors, such as the weaker dollar and strong commodity prices, which are underpinning the rand's strength. Investec Asset Management's portfolio manager Vivienne Taberer said yesterday that other emerging market currencies that have benefited from attractive interest rate differentials, such as the Brazilian real and the Turkish lira, have also shown signs of weakening. She said the rand was set to weaken to levels above R7 to the dollar by the end of the year, before depreciating more substantially to R8,35 by the end of next year.