Amid speculation that Finance Minister Trevor Manual may relax exchange controls in his medium-term October budget policy statement, property commentators are saying such a move will have a positive effect on the property market. Niki Vontas, VLC Properties

Presenter: Lindsay Williams

On the line: Niki Vontas, VLC Properties

Guest: Lavan Gopaul, BP Bernstein

Guest: Chris Gilmour, FM

LINDSAY WILLIAMS: What would be the likely effect if exchange controls were relaxed, or went altogether?

NIKI VONTAS: I think this would have a very interesting impact on property - especially on listed property - because of the advantages of liquidity, the opportunity, also, for local funds to be involved in the international market, as well as internationally-listed property funds to take possessions in our commercial property market.

LINDSAY WILLIAMS: Oh, so you are talking about the commercial side, rather than the residential side?

NIKI VONTAS: Yes, I think residential is already established. Especially in the Western Cape, and some parts of Gauteng - but I really am looking more towards the commercial property market.

LINDSAY WILLIAMS: Do you think that also... wealthy individuals who are looking at South Africa now, and saying: "If I bring all this money in, who is to say that some kind of political instability, at some stage, might mean that I can't get my money out... uninformed people, that might bracket us with Zimbabwe - for example, do you think those types of people might start looking at South Africa again?

NIKI VONTAS: Definitely. I think we are established in a very positive position as far as credibility, political stability, currency as well lately

- with the rand being very firm the whole week between 6.37 and 6.45... I think that corporates, and individuals, are basically taking possession again of the commercial property market, that they lost during the last thirty years. I think we already see corporates, individuals, and foreign investors, looking at our market. Especially the listed property market. The type of liquidity seen since the beginning of the year - R6bn to R7bn worth of property shares traded - some of them are foreign involvements.

LINDSAY WILLIAMS: Do you think there is a lot of money sitting waiting on the sidelines for the potential relaxation of our exchange controls?

NIKI VONTAS: I think so. I think, possibly, it could be. You know, we have, for the first time in many years the possibility to dream big - and I think if you can dream big, you must consequently act. I think there are very positive developments in the commercial property, mainly.

LINDSAY WILLIAMS: You sound very bullish, indeed. Have you got any indications that there might be some positive news on 26 October from the Minister?

NIKI VONTAS: I hope so, because I think there is a window of opportunity to do so - with all the various positive developments in the last few years, and especially during the past few months - with the rand, and also our position on the GDP projections. Our financial position could allow that.

LINDSAY WILLIAMS: Give us a tip now - if you were to position yourself ahead of any potential announcement on a relaxation, which particular part of the market would you go for? Which fund, which equity?

NIKI VONTAS: I would definitely go for prime property funds like Hyprop, Sycom which are still under-valued -according to me - in terms of their potential. They've already discounted some form of their growth, for next year... at least, out of the 27 listed property companies and funds in this country, there are at least 10 of which one needs to be involved in, in the next 12 months.

LINDSAY WILLIAMS: Very, very bullish outlook indeed. Niki Vontas thanks very much indeed for that assessment of the property market.

LINDSAY WILLIAMS: Lavan, very, very bullish talk? I mean quietly confident, that man!

LAVAN GOPAUL: I think he's got a valid point, as interest rates fall - all of your property stocks start to look attractive. I don't necessarily agree with the fact that that is the first sector to look at. I think if we see a relaxation on exchange control, you would probably want to keep an eye on some of our resource stocks, because I know a number of international investors would love to have those in their portfolio. Already, seeing a drive towards the likes of Randgold, Durban Deep, Northern - all of a sudden volumes are starting to pick up...

LINDSAY WILLIAMS: You're very clever, Lavan! I'm talking about property, with a property consultant, and exchange controls, and you end up the conversation talking about gold shares! I'm going to go on to Chris Gilmour now. Do you think people are still looking for exchange controls to be lifted? Do you still think it is a barrier to investors overseas?

CHRIS GILMOUR: I think it is... it's not as big a barrier as it used to be, as we've had a progressive reduction over the past few years. But, I think any country that still has them - it's an indication of government interference... No investor - foreign or local - likes that... I don't think they are going to go in their entirety, in the near future, but I think if we get a further relaxation, it will be deemed to be good.

LINDSAY WILLIAMS: Goldman Sacks, a conference this week again... lobbying for the whole thing to be abolished. They said that the currency would possibly appreciate four percent over an initial period of volatility.

Lavan, what do you think?

LAVAN GOPAUL: I think it's certainly a move that has to happen. But, just to look at it from another point of view, South African properties are extremely attractive for any foreigner - so if you were to do that, yes, huge inflows. In terms of the immediate volatility, on the currency, it is obvious there is going to be a huge exodus, by a few private individuals, and when people come back to sanity - after a while - you are probably going to see a steady appreciation of the currency, yes.

LINDSAY WILLIAMS: Okay, let's look forward to next week now... We've had a hard run on the market - it must be time to take some profits, Lavan?

LAVAN GOPAUL: Certainly. To look at what we have got set down for next week, probably a few bits of information from the US. Unemployment numbers coming out on Friday - that seems to be your most important number. Consumer credit numbers, also. I think all eyes will be looking two weeks ahead, with the Monetary Policy Committee meeting. Bits of company news coming up - Ellerines - that we can look forward to over the next few weeks...

LINDSAY WILLIAMS: In this situation you look at it, and say: "Well, we've got nothing really to trade on now, the rand is going to be stable" - we've heard that from a foreign exchange dealer... economic data is all out...

results season pretty quiet - that could pick up towards the end of the month, and into November, and so, naturally, during quiet periods markets drift off - do you use that to take profits, or do you wait for it to come back, and then buy the dips? Give us some tips.

LAVAN GOPAUL: I think the tips for next week would be to probably keep an eye on the oil price. The oil price is seems to be what is going to be leading commodities - that's going to be pushing your gold price, your platinum price. Obviously tallying with the dollar euro, that's going to give all of the world's markets direction. South Africa in particular, because we get smacked by the gold price as well as the dollar euro, and that's probably where you want to look in the absence of economic or financial data.

LINDSAY WILLIAMS: We also look overseas. Chris, I don't know if you are a political watcher, but I watched this morning, as I was peddling on my bike in the gym, at Kerry vs Bush. Bush looked quite rattled, actually, at certain times. Kerry looked the more composed man. Bush looked a little bit jittery when the camera was on him, when Kerry was answering. What's your call on the US election?

CHRIS GILMOUR: Everyone I've talked to overseas, they still reckon Bush is going to get it, but I must confess watching last night, Kerry was far more relaxed I think than Bush. You're right, Bush looked pretty rattled, he looked tired as well - it's still too close to call, and we've still got another six weeks or thereabouts until the election.

LINDSAY WILLIAMS: Well... it's a calendar month tomorrow... not long to go.

There are two more televised debates coming up. We don't want to get too US-centric but it is a very big influence on all the markets because the shape of the world could be changed by this election.

CHRIS GILMOUR: You're right. I don't know. I'm not a betting man, as you know, but I certainly wouldn't put money on this one. I think it could even be as close as the Gore vs Bush, the one we had four years ago.

LINDSAY WILLIAMS: The one that Gore won?

CHRIS GILMOUR: Yes.

LINDSAY WILLIAMS: Go see a film called Farenheit 911, both of you. It's an absolutely amazing expose. Your final tip, Lavan - next week, what are you doing?

LAVAN GOPAUL: I'm still going to look at consumer stocks... and keeping an eye on resource stocks - particularly your gold shares, as I mentioned just now. A little bit of interest coming back into the likes of Randgold, Durban Deep - shares that people have ignored for months, literally, and driven down to a third of their previous values. I think if gold trades at the $420 level, it's broken out of that US Dollar latch that it had tied in with - I think that's probably going to give the signal to get back into some of the gold shares.

LINDSAY WILLIAMS: Well you tipping gold shares is a signal for Americans to sell them, cause AngloGold Ashanti, currently, on the New York Stock Exchange - down 1.88%.

LAVAN GOPAUL: But week-on-week they are still much higher.

LINDSAY WILLIAMS: Only teasing! Gold Fields is down 1.1% in dollar terms.

Harmony 2.1% down, but Durban Roodepoort Deep - the one that you just picked

- is up 1.44% so bucking the bearish tone on other South African gold shares trading in the United States