Summit TV

Transcript:
No, definitely not. I’ve actually got a buy. We’ve had very good gold prices coming out almost on a daily basis - or certainly on a weekly basis new highs being made in the gold price. A lot of this has been on the back of a weak dollar. I know there’s a lot of market participants who are expecting the dollar to continue weakening into perpetuity. We are in a slightly different camp as far as this is concerned - we think that the dollar has probably weakened enough for the time being. If we look at the economic picture that comes out of Europe - the eurozone and UK - versus the US there’s definitely better signs coming out of the US than the UK. We are very concerned about the UK - they will in all likelihood have an election in the not too distant future. They have around ₤200billion sterling in debt that needs refinancing and rolling. Typically that’s going to happen at higher rates than what they currently have. This can’t be good for the pound - but it will be good for the dollar which means that if the dollar strengthens you will certainly find a weakening in commodity prices and amongst other things the gold price. You might find it very surprising that my stock pick for today is a gold stock - why would I pick Harmony as my stock pick if I’m expecting the gold price to decline from current levels? Obviously what you will find if the dollar does strengthen from its current levels is that the rand will weaken - and on that basis Harmony is one of the most geared stocks that we have that’s also lagged significantly compared to many of the other gold stocks and certainly the rest of the markets. It’s the worst performing top 40 stock on a year-to-date basis. I can hear the rumblings in the background people saying “for obvious reasons” but I’m prepared to stick my neck out and say this is a very geared stock and there’s some catch-up to do with the very high gold price. That’s my pick for Christmas.

Broker:
Nerina Visser, Nedbank Capital

Email video link

Click here to license this clip

ARCHIVES 2009

Click here to see previous share picks

MORE VIDEOS

Face 2 Face

Roffey Review

Stock Pick

Stock Watch

You and Your Money

Summit Investor

Summit Survey

Intellectual Property

CSI: The Bottom Line

Health Watch

Tax Issues

Sake Met Summit

Op Die Keper

SOUTH AFRICA'S ESSENTIAL BUSINESS CHANNEL, DStv CHANNEL 412

Summit Television, a division of the African Business Channel (Pty) Limited, disclaims all liability for any loss,
damage, injury or expense however caused, arising from the use of or reliance upon, in any manner,
the information provided through this service and does not warrant the truth, accuracy or
completeness of the information provided. © Summit Television 2009.

Use of our web site material in any form is prohibited without writtten permission. Usage requests: webadmin@summit.co.za