Moneyweb (Johannesburg)
Alec Hogg
15 October 2001
broadcast transcript
It's an outside broadcast this evening from the Blue IQ exhibition in the Sandton Convention Centre. Wow, David, this place is going to be packed this time next year - September next year - the Earth Summit, or the World Summit. It's on for the second time in the last 10 years. And surely, as it's coming to Johannesburg, as we heard earlier from Sir Mark, the former Shell chairman, this will be a hive of activity.
DAVID SHAPIRO: Certainly for Johannesburg, and I think it gives us a chance to showcase Gauteng. I think after the Racism Conference we need to stage something that is very positive for the country. Certainly there will be enough people here to see what South Africa can offer. So I like these conferences. I think that it puts us in the public limelight. You know, when I say public I'm talking internationally. And hopefully it will be a success.
MONEYWEB: Cavalcades, traffic jams, 50,000 visitors that we can expect over those 10 days when things happen here. We were hoping to cross to London to speak to Hendrik Pfaff of Sanlam Investments. Don't worry about it, we'll do it tomorrow evening. As an outside broadcast, some little things go wrong and we don't have international lines, so it appears as though at least Blue IQ is watching its budget in one respect. David, a big issue we didn't talk about earlier, though - on the JSE today we had platinum shares going down on a day when the platinum price rocketed.
DAVID SHAPIRO: I think platinum shares came back because of the stronger rand. The rand has really strengthened quite dramatically. But, on the other hand, we had platinum going up and I think if platinum remains at these levels, certainly platinum shares should reverse. What really drove it upwards was a story that CSFB, Credit Suisse First Boston, who have been heavy in metal trading, they've been big lenders of platinum, are withdrawing from metal trading . Now what that did is to push up the lease rates. Those are the borrowing rates at which people who are going short would actually borrow platinum, sell it to the buyer, and hopefully wait for the price to come down and buy back platinum. Now, without the facility to lend or to borrow, I think everybody ran in and covered their positions and hence the price shot all the way up to about $466.
MONEYWEB: It's at $457 as we speak, the platinum price. But you mention that the platinum shares on the JSE were affected more by the falling rand. Now, if you go back to September 11th, the platinum price in rand terms was considerably lower, yet we have platinum shares, which are down as well.
DAVID SHAPIRO: I still think we're absorbing the excesses in platinum shares that we saw last year. I still remain very positive on platinum. I think if we look at it, the yields are not demanding. They're still at very low multiples, giving very high yields and, even at these levels, no matter where the rand or platinum price is, they're still producing big margins on their sales. So I still think there's a lot of upside. But these wide fluctuations, I think, do confuse investors. You've got the platinum price going up, you've got the rand going down - so a little confusing.
MONEYWEB: Don't watch the day to day ...
DAVID SHAPIRO: Don't watch it, exactly.
MONEYWEB: If you think platinum's good, buy it and stick with it.
DAVID SHAPIRO: Absolutely, I agree with you. Just say with it.
MONEYWEB: Well this has been a first for Mr Shapiro, doing an outside broadcast. I'm sure I haven't done too many of them either. I hope you've enjoyed the experience. It's certainly full credit to the Gauteng government for getting off their buts and investing this kind of money and having high ambitions.
DAVID SHAPIRO: I think so, and I think it does a lot for South Africa as well. I still believe this is the hub of business activity and it's nice to see Gauteng doing something about it.
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