Darren Ashton: Nedcor Securities


BROADCAST TRANSCRIPT: Darren Ashton of Nedcor Securities is with us to talk single-stock futures. Well, the markets have been volatile, you guys must have had an absolute tidal wave of a time.

DARREN ASHTON: Well, what a day, Alec. We had a great bounce in the JSE today. But I think that we have to question the validity of this bounce. I say that for two reasons, one being that our market’s purely driven on war sentiment at the moment, coming out of Iraq, and the possibility that the war will be over quite soon. And the second is that fundamentally nothing has really changed in the US economy. We still see disappointing figures coming out of the US. Unemployment figures last week again disappointing. And we’re expecting some more figures out this week.

MONEYWEB: So hype, hype for the moment but if you’re a smart investor you’d see through the noise. Although, in your game, your colleague Arthur Buchner was once saying to us that long-term was like three days.

DARREN ASHTON: That’s correct. We’re more short-term traders, so for us long-term is three o’clock. But I still think that there are a lot of stocks that are offering very good value in this short term at the moment. I’d say I’d look at rand-hedge stocks at the moment. I believe that the US still has to fund this war, which is going to place a lot of pressure on the dollar in the months coming ahead. I think that the rand is going to move back. I think this was just a temporary bounce at the moment.

MONEYWEB: You say it’s going to move back – it’s going to weaken?

DARREN ASHTON: It’s going to weaken, that’s correct.

MONEYWEB: But if the American’s have to fun.

DARREN ASHTON: It’s going to strengthen.

MONEYWEB: It’s going to strengthen.

DARREN ASHTON: That’s correct. That’s correct, thanks. Sasol, as well, went ex-div today, so the stock was actually up 60c. I know there were rumours in the market that they were could possibly be pulled into this apartheid reparations claim. The market didn’t react to that at all. The Brent price was also down, so we’ve seen a bit of divergence coming into the Sasol price and I think that Sasol in the short term, could be offering some good value.

MONEYWEB: So you’d like to buy it as a long, in other words?

DARREN ASHTON: As a long, that’s correct.

MONEYWEB: You’re not worried that, once the Americans do start pumping that $5-a-barrel Iraqi oil, that the oil price itself will come under pressure and hence Sasol might be hard-pressed.

DARREN ASHTON: There is a possibility.

MONEYWEB: But I suppose that is long-term?

DARREN ASHTON: That is long-term yes. When I say a buy. I think we could see it moving up by the end of the week.

MONEYWEB: So, from your perspective, and for people who play in the single-stock future area, ride the wave for the moment, the Americans are getting only good news coming out of Iraq right now, and if that continues the markets should get stronger.

DARREN ASHTON: I think the important thing when looking at trading in single-stock futures is that it’s not necessary to sit on a position for a great deal of time. The gearing offered by single-stock futures allows investors to make good returns with relatively small moves in the share price. So I think that it’s a sort of game where you have to exercise tight stop-losses, monitor your position very, very carefully and there are a lot of positions on the long side and the short side at the moment that are offering good value.

MONEYWEB: Darren Ashton is with Nedcor Securities.

Posted in Market commentary

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