JSE. Picture: MICHAEL ETTERSHANK
JSE. Picture: MICHAEL ETTERSHANK

The JSE opened flat in cautious trade on Wednesday ahead of the budget speech later in the day, with banks recovering and resources and property stocks losing ground.

Banks were sharply weaker earlier in the week, but turned around in early morning trade amid reports the Competition Commission would be flexible on fees regarding the collusion and price fixing charges against 18 local and international banks.

Business Day reported the fine of R69.5m imposed on Citibank represented 4% of turnover, and not the 10% of annual turnover previously stated. However, the commission warned it would go for maximum penalties if banks did not come forward early to co-operate.

The JSE showed little reaction to renewed record closes on Wall Street, with the Dow firming 0.58% to 20,743 points on Tuesday on broad gains in most sectors. Asian markets were mixed on Wednesday morning, with the Nikkei flat and the Hang Seng gaining 0.96%.

The Dow closed higher as retailer Walmart exceeded expectations, with reported online sales jumping 29%. This followed reports that investment guru Warren Buffett had sold most of his Walmart holdings.

"Strong earnings reports from Home Depot and Walmart together with optimism about President Donald Trump’s economic agenda lifted sentiment," Nedbank Corporate and Investment Banking analysts said in a note.

Corporate results drove market sentiment on the JSE, with Adcock Ingram and Group Five reporting in the morning, following a slew of results on Tuesday. In the telecommunications sector market focus was on reports that Telkom was eyeing Cell C for a takeover, with Blue Label Telecoms also in the race.

At 9.37am the all share was 0.08% up at 52,628.60 points and the blue-chip top 40 added 0.09%. Banks rose 0.38% and industrials 0.28%. Property shed 0.54%, resources 0.51% and food and drug retailers 0.45%.

Anglo American was 0.90% lower at R217.98 amid reports the global miner was planning yet another strategic reversal by not selling interests in certain commodities, such as nickel, which it previously said it would sell.

Transport and logistics group Imperial was 1.08% lower at R174.10. Headline earnings per share (HEPS) for the first-half to end-December dropped 15% to R6.82.

Among banks, FirstRand were up 1% at R50.68 and Nedbank added 0.36% to R243.30.

Sasfin was 2.11% lower at R65. It said on Tuesday interim HEPS to end-December 2016 were expected to be 17%-21% lower than the year-earlier period.

Among retailers, Shoprite was 0.58% softer at R193.50 after reporting strong interim results on Tuesday.

Steinhoff was 0.38% up at R72.27 as the market continues to mull the decision to reverse the merger plan of Steinhoff’s African interests with Shoprite.

In the construction sector Group Five shed 2.91% to R23.32. It reported an interim loss on the R255m settlement reached with the authorities.

Aveng lifted 3.60% to R7.19. Basil Read Holdings was 4.35% higher at R2.40.

Among property stocks, Capital & Counties gained 1.95% to R49.79, but Hyprop softened 1.17% to R121.46.

Telkom was 0.38% lower at R69.01.

Adcock Ingram was 2.64% up at R56.45. It reported interim revenue increased by 11% to R2.985bn.

Clover Industries lost 0.47% to R19.01. The group said on Tuesday it expected HEPS for the interim period to end-December to be between 12.1% and 17.1% lower, compared to the previously comparable period.

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