According to global and country equity indices published by MSCI Barra, returns from the Johannesburg bourse vary substantially when measured in rands, and then in dollars. In rand terms, the South African equity market bottomed out (for now) on 20 November 2008, and has since risen by 21%. Measured in dollar terms, the same market bottomed out on October 24 2008, and has since gained a healthy 65%.Over the past 12 months, the rand (which is typically inversely quoted against the dollar) has been as weak as 11.87 to the greenback, and as strong as 7.18, a huge variance that ranks the rand as one of the most volatile currencies. The rand is currently trading around 8.50 to the dollar, some 15% below its strongest over the past 12 months. The rand, however, has bounced 40% from its low point against the dollar over the past 12 months; on that basis, it ranks as the world's best performing currency.In round numbers, a strong currency hurts the revenue of exporters, especially those which sell output in dollars. Importers benefit the most; all else being equal, import costs fall, especially when dollars are the applicable currency. South Africa's mining companies are among the most vulnerable to a strong dollar, given that the vast majority of mining product is exported and sold in dollars. The realities can be traced through to stock pricing.Thus the stock price of Harmony Gold in Johannesburg, at around R82.10 a share, is around 38% below its 12-month highs, and 58% above lows. On the New York Stock Exchange, where Harmony Gold is quoted around $9.45 a share, the number is a more modest 28% below 12-month highs, and a far more impressive 73% above lows.While general stock pricing for the global mining sector has shown ongoing evidence of a turnaround from late in 2008, there are also elements of selectivity that apply. Individual commodity pricing is always idiosyncratic; in dollar terms, gold bullion has shown the most resilience over the past year. At the same time, a very good number of commodity prices collapsed, with most now on the way to recovery, but still way below previous highs.METAL PRICES

Industrial, USD/lb

Low*

High*

Current

From low

Copper

1.28

4.06

2.05

60.8%

Aluminium

0.58

1.53

0.70

20.7%

Lead

0.39

1.19

0.64

65.1%

Tin

4.40

11.57

5.67

28.9%

Nickel

4.01

13.13

5.44

35.6%

Zinc

0.47

1.08

0.69

47.4%

Precious, USD/oz

 

Gold

682.41

1006.29

904.28

32.5%

Platinum

744.25

2225.50

1131.75

52.1%

Palladium

160.75

478.50

223.75

39.2%

Silver

8.46

19.48

13.47

59.2%

* 12-month

Smaller, and also undercapitalised, miners have shown to be extremely vulnerable. A good number of the very worst performing stocks on the Johannesburg bourse fall under one or both of the mining classifications mentioned: Pamodzi Gold (suspended from trading) Kimberley Consolidated, BRC Diamondcorp, Metorex, Rockwell Diamonds, TransHex, SA Coal (suspended), Wesizwe, Jubilee Platinum, Wescoal, Merafe, Sentula, Andulela, Tawana, Diamondcorp, and so on.Three-month interest rates in South Africa are currently around the 8% mark, as are ten-year government bonds. This compares to three month rates of between 0.2% and 1.4% in the world's biggest developed economies, where ten-year government bonds range between 1.4% and around 4%. Underpinned by a highly developed banking and financial system, South Africa continues to attract heavy portfolio flows known as carry trades, where investors borrow in a low interest rate jurisdiction and score heavily on domestic rate returns.Risk appetite has been increasing over the past six or so months; the MSCI world equities USD index has bounced by 35%, but the MSCI emerging markets USD index, which includes South Africa, has jumped by a rather impressive 58%. There are few countries that offer higher interest rates than South Africa, and each of those has issues: Russia (slumped oil prices), Turkey (current account and budget deficits), Pakistan (general instability), Argentina (financial market worries), Brazil (underdeveloped financial markets), and Venezuela (lots of everything that worries investors).The rand's performance can also be seen in the context of broadly defined commodity currencies. On this front, the overall strength of the dollar should not be understated, however. Measured on the dollar index, the dollar itself ranks as perhaps the best performing currency of all over the past year. Thus, while the rand has done very well indeed, it currently trades, as mentioned, around 15% below its highs against the dollar over the past year.A number of broadly described commodity currencies have performed poorly over the past year. The washed out ruble has caused something of a currency crisis in Russia, and the Ukrainian hryvnia has performed nearly as poorly as the Icelandic krone, which descended into pariah territory last year, during one of the most comic side stories in the so-called global markets crisis. The Kazakhstan tenge, Argentine peso, Norwegian krone, Swedish krona, Mexican peso, and New Zealand dollar have not done much at all. The Canadian dollar, Brazilian real and Australian dollar have done somewhat better, but, like the rand, trade below 12-month highs.SELECTED CURRENCIES

From

From

high*

low*

Dollar DXY index USD

84.04000

-6.2%

17.8%

 

USD/unit

 

 

Unit/USD

South African rand ZAR

0.11775

-15.4%

39.8%

8.49

Indonesian rupiah IDR

0.00010

-13.2%

24.6%

10436.00

South Korean won KRW

0.00078

-22.0%

25.1%

1277.25

Slovenian tolar SIT

0.00556

-16.9%

19.9%

179.82

Peruvian sol PEN

0.33683

-7.4%

10.0%

2.97

Chinese yuan CNY

0.14659

-0.2%

2.7%

6.82

Chilean peso CLP

0.00175

-18.8%

20.1%

571.45

Japanese yen JPY

0.01017

-11.4%

12.5%

98.32

Hong Kong dollar HKD

0.12903

0.0%

0.9%

7.75

Venezuelan bolivar VEB**

0.00047

0.0%

0.0%

2147.30

Jordanian dinar JOD

1.41388

-1.0%

0.8%

0.71

Saudi Arabian riyal SAR

0.26665

-1.0%

0.7%

3.75

UAE dirham AED

0.27226

-0.7%

0.1%

3.67

Australian dollar AUD

0.74230

-24.6%

23.5%

1.35

Moroccan dirham MAD

0.11927

-8.9%

7.1%

8.38

Taiwan dollar TWD

0.03015

-9.0%

6.3%

33.17

Swiss franc CHF

0.88378

-11.5%

8.7%

1.13

Singapore dollar SGD

0.67833

-8.8%

5.7%

1.47

Iran rial IRR

0.00010

-7.3%

3.9%

9854.50

Brazilian real BRL

0.46814

-27.2%

22.7%

2.14

Egyptian pound EGP

0.17773

-6.5%

1.5%

5.63

Malaysian ringgit MYR

0.28255

-11.0%

5.6%

3.54

Canadian dollar CAD

0.85012

-16.5%

11.1%

1.18

Philippine peso PHP

0.02098

-11.3%

5.3%

47.66

Thai baht THB

0.02843

-10.6%

3.6%

35.18

Kuwaiti dinar KWD

3.43466

-9.2%

2.2%

0.29

New Zealand dollar NZD

0.58283

-26.4%

19.1%

1.72

Mexican peso MXN

0.07530

-25.8%

17.4%

13.28

Danish krone DKK

0.17893

-16.8%

8.2%

5.59

Euro EUR

1.33280

-16.9%

8.1%

0.75

Swedish krona SEK

0.12556

-26.1%

17.2%

7.96

Bulgarian lev BGN

0.68134

-17.0%

8.0%

1.47

Czech koruna CZK

0.04990

-28.2%

17.7%

20.04

Turkish lira TRY

0.63719

-26.8%

16.2%

1.57

Colombian peso COP

0.00044

-27.3%

15.9%

2251.14

Indian rupee INR

0.02018

-17.3%

5.3%

49.55

Norwegian krone NOK

0.15233

-24.4%

11.4%

6.56

British pound GBP

1.50980

-25.1%

11.8%

0.66

Pakistani rupee PKR

0.01242

-18.2%

4.1%

80.51

Hungarian forint HUF

0.00469

-32.8%

18.5%

213.38

Nigerian naira NGN

0.00676

-20.4%

5.7%

147.83

Albanian lek ALL

0.01014

-22.6%

5.6%

98.59

Argentine peso ARS

0.27038

-18.7%

0.8%

3.70

Russian ruble RUB

0.03045

-29.8%

11.3%

32.84

Romanian leu RON

0.32021

-29.2%

10.5%

3.12

Israeli shekel ILS

0.24180

-22.6%

3.4%

4.14

Polish zloty PLN

0.30351

-38.7%

18.8%

3.29

Kazakhstan tenge KZT

0.00664

-20.7%

0.6%

150.57

Ukrainian hryvnia UAH

0.12422

-43.9%

21.5%

8.05

Iceland krone ISK

0.00792

-43.0%

18.0%

126.27

* 12-month

** Some currencies are tied, or fixed, to the USD.

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