MARKET WRAP: JSE starts week on positive note with banks gaining on stronger rand
The JSE all share kicked off the new week on a positive note, firming 0.43% on Monday with platinums, banks and financials faring best.
The market kept up the momentum in thin trade following last week’s upbeat performance, when the all share recorded its best weekly performance so far this year, adding 3.27%.
Volumes on Monday amounted to R14.3bn.
The stronger rand supported interest-rate sensitive sectors such as banks and retailers ahead of the Reserve Bank’s interest-rate announcement on Thursday.
The all share ended the day at 53,827.40 points and the blue-chip top 40 gained 0.40%. The platinum index rose 3.37%, banks 0.87%, financials 0.56% and resources 0.37%. The gold index lost 0.41%.
The market was supported by higher metal prices with platinum up 0.87% at $929.82 an ounce at the JSE’s close. Gold had added 0.45% to $1,233.73.
Brent crude was 0.40% off at $48.81 a barrel.
Star performers included platinum producer Lonmin, jumping 14.82% on a better-than-expected production and business update, with Kumba Iron Ore gaining 2.14% to R175.77 following its update on Friday.
Standard Bank added 1.37% to R154.38 and FirstRand 0.54% to R50.35.
The rand firmed to a three-week best level of R12.8912 to the dollar in intraday trade as the latter weakened to $1.1487 to the euro. The rand was at R12.9270 in early evening trade.
Bonds were only marginally firmer on the stronger rand as the market awaited direction from interest-rate decisions this week, with the European Central Bank also due on Thursday.
The yield on the benchmark R186 bond, which broadly reflects the cost of government borrowing, was at 8.635% from 8.665%.
The performance is a lot better when compared with a week ago, when the yield on the R186 hit 9%.
"The benefit of SA’s open, deep and liquid bond market is that government has ready access to funding at reasonable interest rates," Old Mutual Multi-Managers analysts Dave Mohr and Izak Odendaal said.
"However, with foreigners owning more than a third of outstanding rand-denominated bonds, and facing no capital controls, our yields will be priced off global yields. Since early 2016, SA benefited from a search for yield," they said.
The futures market followed the stronger JSE‚ with the top-40 alsi futures index up 0.11% at 47‚540 points. The number of contracts traded was 23‚116 from Friday’s 22‚821.
With Andries Mahlangu