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From Peregrine Securities, Prime Brokers, South Africa: April favored hedge funds at the expense of brokers, with strong returns delivered across all strategies on very low trading activity. Funds serviced by Peregrine Prime delivered 2.43% on average, in which long/short clocked 2.91%, market neutral 1.92% and multi-strat 0.20%. While caution remains appropriate concerning the global economy, it seems that some fund managers may be regaining a degree of confidence in their judgments of value.

After the strong bounce in March, led by Resources and Financials, April showed a pleasing continuation of the upward trend. Financials and Industrials lead the way, buoyed both by global factors, a strengthening rand, and declining local interest rates. The market also took the SA election results in its stride, although the results were largely as expected.

The performance of financial stocks was especially impressive, adding 5.2% to their outstanding 14.1% in March, while Industrials added a further 4.8% (7% last month). Resources were the only weaker spot, down 3% after 14.5% previously. Given their high weighting in the Top40, however, this saw the overall indices only slightly up on the month.

Positive news continued to improve sentiment, especially with regard to Financials, although as usual the broader economic outlook remains extremely complex. However better sentiment and increasing (and increasingly stable) prices contributed to a distinct decline in g......................

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