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To: long-gone who wrote (26220)	1/14/1999 9:06:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116764

I just think buying Dollars and USA hardly can be called a good defense anymore so what next... Stock choices must be stringent, say analysts SA INVESTORS will place their faith in information technology (IT), banking and rand-protected shares this year to bring the desired stock returns which were elusive last year, analysts say. Some also bet on good performances in media and education stocks while gold shares, the volatility of which generally demands a strong stomach, were given a cautious thumbs up as a safe haven against the unstable rand. All agree that stock choices will have to be more stringent after the pain endured on the Johannesburg Stock Exchange last year, when the emerging markets crisis wiped 12% off the benchmark all share index and 17% from the rand's value. "We will be more ruthless in our share selection.… We are looking at companies with quality earnings and especially with a high offshore element," said Iain Anderson, head of research at Infiniti Asset Management. The rand's slump to a 14-week low against the dollar yesterday on debt worries in Brazil reinforced fund managers' appetite for stocks with foreign currency earnings. Classic rand-hedge shares include De Beers, the world's biggest diamond producer, stablemate Anglo American, and luxury goods stock Richemont, which sold its Rothmans International unit in a $21bn deal earlier this week. Banking stocks were another keen choice of funds in anticipation of cuts in sky-high interest rates which will ease banks' bad debt pressures and help grow lending books. A poll of 25 economists reveals that commercial banks' prime rates are forecast to fall to 18,3% by the end of the year from 22% at present, but yesterday's renewed collapse of the rand has dimmed rate cut prospects. "There is not enough of a rand hedge in banking shares. The economy is so weak. I am a little worried," said Tim Allsop at Nedcor Investment Bank Asset Management. However, few fund managers can find fault with IT stocks, most of which managed to buck the JSE's weakness last year, lifting the electronic and electrical index over 30%. "There is enormous growth potential in IT companies, especially those exposed to the Internet and software development," said Malcolm Chapman, general manager at Absa Asset Management. Favoured stocks include small software operator Ixchange Technology Holdings, heavyweight Comparex, which sources about two thirds of its income offshore, and software investment firm Billcad, which has drawn hefty speculative and institutional interest recently. The media sector, where restructurings and corporate finance action is expected this year, and firms invested in private education - at a time when SA's teaching system is in a state of flux - are also expected to perform well this year. Stock investors' distress last year was highlighted this week with the release of a survey tracking the performance of SA's 204 unit trusts, which manage funds worth R72bn. "Over periods of three, six and 12 months barely half of the general equity funds, which represent a third of the assets of the unit trust industry, outperformed the all share index," said Hugo Lambrechts of Pretoria University's postgraduate business school, who compiled the survey. "Last year was a sobering year." - Reuter. bday.co.za