MARKET WRAP: JSE ends flat as reporting season gets into full swing
The JSE was flat on Tuesday as retailers benefited from a further rise in the share prices of Steinhoff and Shoprite after the pair announced on Monday they had broken off merger talks.
Shoprite issued interim results on Tuesday which were welcomed by the market, further boosting its share price.
Banks remained under pressure as the investigation by competition authorities into price-fixing in currency markets continues.
The rand weakened in anticipation of what may be included in Finance Minister Pravin Gordhan’s budget speech on Wednesday afternoon.
Gordhan is expected to announce fiscal contraction measures, namely more taxes and lower government expenditure, in an attempt to reduce SA’s budget deficit. The Treasury said earlier this week that it expected the shortfall to be 3.1%, and this would decrease slightly over the next two years.
The JSE all share closed 0.05% higher at 52,586.60 points and the blue-chip top 40 added 0.11%. Food and drug retailers gained 1.16% while banks lost 1.13%. Platinums added 0.52% and resources 0.46%. The gold index gave up 0.69% and financials 0.23%.
Shoprite closed 3.52% higher at R194.62. It earlier reported diluted headline earnings per share rose 15.5% to 460c. The interim dividend declared was 15.4% higher than the previous one, at 180c per share.
Steinhoff added 2.70% to R72.
After firming in early-morning trade Anglo American closed 0.42% lower at R219.95 with analysts saying most of the good news from its annual results was already reflected in its price. The group said it had reduced net debt by 34% to $8.5bn in the year to end-December, well below its $10bn target.
BHP Billiton rose 1.03% to R229.06. The global miner swung into profit in the interim period to end-December, reporting headline earnings of $2.95bn from a loss of $391m in the previous corresponding period.
In the banking sector FirstRand dropped 2.62% to R50.18 and Barclays Africa 0.66% to R160.27.
In early evening trade the rand was at R13.1145 to the dollar from Monday’s R13.0452. The benchmark R186 bond was bid at 8.79% from 8.76% previously.
Futures were slightly higher with the local near-dated top-40 Alsi futures index gaining 0.17% to 45,709 points with 20,997 contracts traded from Monday’s 17,847.
With Maarten Mittner, Reitumetse Pitso and Matthew Stevens