The past two years of Top Performers rankings have been dominated by commodity stocks, especially platinum shares. The reason is simple - they got the double benefit of a weak rand and sharply higher US dollar prices for their products.
But the rand has been appreciably stronger during the past 18 months and in recent weeks there has been a noticeable slowdown in commodity prices. One of the main reasons given for this slowdown is China's desire to cool its economic growth. The relatively jobless recovery in the US won't help commodity stocks much, either. So the two things that drove demand for platinum stocks have dissipated.
Ask 10 economists where the rand will be a year from now and you will get at least 10 different answers. Though it's not a major currency, it's one of the most actively traded. Traders love it because of its volatility. The more daring among them can make great profits if they read it correctly.
A consensus of sorts does appear to be emerging and that is that the US dollar will remain relatively weak during 2004. If that happens, the rand is likely to remain relatively strong against the dollar, though it may show weakness against the British pound and the euro.
That would not be good for a number of the top performers in the table, notably platinum stocks such as Messina, Impala and Gencor. Other commodity stocks would not fare too well and it's possible that locally orientated companies would do relatively better. There are plenty of them in the table, just waiting to rise to the top.
