MARKET WRAP: Rand gains of almost 2% in the week push JSE lower
The rand gained almost 2% in the week after strengthening nearly 2.5% last week as global emerging-market currencies ride the crest of a wave.
A weaker dollar, positive emerging-market sentiment and a higher gold price are all driving the rand. The big question, said Old Mutual economist Rian Le Roux, was whether the rand was stabilising, "or is the big hit still coming"?
The local currency fell 9% against the dollar following President Jacob Zuma’s Cabinet reshuffle at the end of March, in which finance minister Pravin Gordhan was replaced by Malusi Gigaba. S&P Global Ratings and Fitch subsequently downgraded SA’s sovereign credit rating to junk.
The JSE closed weaker on Friday in the shortened trading week following the Easter weekend with broad-based losses recorded. The bourse ended the week 2.46% lower, which marked its steepest weekly decline since December.
The all share closed 0.58% lower at 52,194.60 points and the blue-chip top 40 dropped 0.51%. Platinums ended the day 2.10% lower and general retailers 1.17%. Property lost 1.07%, gold 0.70%, resources 0.68% and industrials 0.54%.
Global diversified miner Anglo American closed 1.70% lower at R188.55, while Kumba Iron Ore lifted 3.50% to R184.75.
Rand hedge British American Tobacco was down 0.98% to R873.65.
PSG ended 0.68% softer at R262.20. The investment holding company added 3.66% during the week as the market warmed to the group following the release of its annual results.
Among platinum miners, Anglo American Platinum lost 2.52% to R342.63 and Northam 3.19% to R51.51.
Sanlam lost 1.33% to R68 and Discovery 1.03% to R127.18. S&P Global Ratings warned in the week that insurers were set to struggle to grow premiums and profits amid weakening economic growth.
In retailers, Massmart plummeted 8.14% to R128.50.
Clicks ended the day 1.01% lower at R131.16. The group said earlier it grew its overall interim income 11% to R13.5bn and after-tax profit 14.5% to R582.8m.
In the early evening, the rand was at R13.16 to the dollar from Thursday’s R13.13. At the same time the benchmark R186 bond was bid at 8.64% from 8.68% previously.
Futures were weakened by the stronger currency with the local near-dated top-40 Alsi futures index 0.69% lower at 45‚916 points. The number of contracts traded was 16,924 from Thursday’s 19‚328.
With Maarten Mittner and Reitumetse Pitso