Thursday, October 9, 2008

The Swaziland Stock Exchange (SSX) not affected by global credit crunch

By Hlengiwe Ndlovu

THE Swaziland Stock Exchange (SSX) has not been affected by the credit crunch in global financial markets. Even though major players in world stock markets like the Johannesburg Stock Exchange (JSE) slumped down to pressures, the local SSX All Share Price Index has remained fairly stable over the past few days.

SSX Information and Training Officer Peace Mabuza said this stability mainly emanates from the fact that companies listed on the exchange have a local outlook, with their operations mainly being of local nature plus financing.

Naturally, he said investors had nothing to be agitated about because of the localisation of these companies. Since the global credit crunch crisis, share prices of all companies listed on the SSX have not gone down and the All Share Price Index has also remained stable. In short, for the local index it is business as usual.

Mabuza said the Royal Swaziland Sugar Corporation (RSSC), which is also a listed entity on the SSX, has also been performing well despite that the company's scope is of an international nature.

"It is impressive to note that the RSSC has been performing well in the wake of the global financial market crisis. The company's cross border operations have not jeopardised its performance in the index," he said. Adding, he said investors had displayed their confidence in the SSX despite the turbulent financial scenario on the international scene.

Mabuza also highlighted that Nedbank Swaziland has also not conformed to the credit crunch crisis despite that banks were the most affected in mortgages. He said the bank's recently released financial statements were an indicator that Nedbank was performing quite well.

He said even though the bank's defaulters may have increased in the past year, its recorded profit indicates Nedbank's impressive performance.

Meanwhile, South African news agency, Sapa reported that the global financial catastrophe continued with Icelandic bank Glitnir, Anglo Irish Bank and Belgium bank Dexia bailed out by their respective governments.

"The Bank of Canada said it would buy $3.8 billion of securities from commercial banks and brokerages for 28 days and Russian authorities, spooked by market movements, closed their stock exchange for two hours. Yesterday also marked the end of the third quarter which would have had traders closing out positions," stated the publication.

Craig Pheiffer, GM of investments at Absa Investments, said: "Clearly there are also bargain hunters in the market after Monday's fall, but despite all the evidence of value out there, you still need to be very careful and not rush into any major long-term investment decisions. Locally, we also had quarter end, so one should be careful about reading too much into the positive move on the bourse."