by CLARICE BRAUN (MEMBER OF THE SOUTH AFRICAN INSTITUTE OF STOCKBROKERS) SASFIN FRANKEL POLLAK SECURITIES (PTY) LTD.

Sasfin Frankel Pollak Securities has been in existence for more than 100 years and is one of South Africa's oldest Stockbroking houses. The Plettenberg Bay branch has been in existence for 6 years and is the only Stockbroking firm between George and Port Elizabeth.
We have an excellent team of Researchers who give us information based on quantitive and fundamental analysis and company visits. Purchase and sales decisions are left to the relevant Portfolio Manager operating within clearly defined mandates and house investment philosophy. This allows flexibility and the ability to respond quickly to market developments.
The Reserve Bank has announced that the Repo rate has been cut a further 1.5%. The banks have followed suit and cut their prime rates accordingly from 13.5% to 12%.
This will bring the Bank's total rate reduction since it began easing monetary policy in June this year to 500 basis points. Interest rates are now half a percentage point lower than when the Reserve Bank began tightening to stem price pressures. In fact interest rates are back to January 1987 levels.
The drop in the interest rates has not caused the rand to weaken; on the contrary it has strengthened and is maintaining its strength to around R7 to the US Dollar. Obviously the ideal situation is to have a stable currency and one that is predictable.
The JSE still offers good value at present in spite of its strengthening in recent weeks. As interest rates decline consumer spending increases and this drives company profits up. Our Price Earnings (P.E.) ratios are +/- 11% - well below the US and European markets.
Our shares have performed well since their very low base at the end of April. The Overall index has improved 28% since then, but is only 3.5% higher for the year to date. We are of the opinion the Overall Index should end 2003 in a healthy state.
There have been some very pleasing results coming from local small and mid cap stocks particularly those that are not reliant on exports and are domestically driven. Even the IT sector is starting to look more robust.
We advocate the accumulation of defensive stocks such as food, health and the construction industry. We also see cautious rises in the commodity sector in spite of the rand's strength. We are perturbed about the agricultural outlook for the year ahead which after mining is our biggest earning sector.
The heatwave being experienced in the Northern part of South Africa is a cause for concern. Steady rains are needed soon to prevent this sector from loss.