Daily Equity Report

There are some signs that global the global economy is picking up from its very deep lows. However with the excesses still to be worked out, any growth is likely to be at low levels for a long time still. Two indicators that reflect firmer global demand are the oil price and the Baltic Dry Index.

According to statistics produced by Wachovia economists, the US has been in recession for a year and a half and this will likely mark the largest contraction in the US economy in the post Word War II era. They are forecasting an uptick in GDP numbers in the second half of this year and into 2010.

US GDP

Oil broke above $73/bbl yesterday after the International Energy Agency raised its outlook on global demand, to 83.3Mbd, citing improving economic fundamentals.

A report across my desk mentioned also that a number of infrastructure projects are coming back on line and there has been increased bidding for energy assets (e.g., Toronto-listed Addax Petroleum Corp soared yesterday after reports that Chinese firms will soon unveil takeover offers). It also mentioned that oil traders see “funds money” flowing into the oil market again.

The Baltic Dry index is a shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed).

The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) - Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index's composite measurement.

After collapsing in 2008, global trade has started picking up.

Vincent Heys will be in JHB on the 25th and 26th June and has some time to meet to discuss your investments. Please contact him on Vincent@seedinvestments.co.za

Take care and have a fantastic weekend

Kind regards

Ian de Lange
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144966