JSE jumps on Naspers as Moody’s update supports the rand
The JSE was sharply higher at midday on Wednesday as Naspers rose 3.53% on mixed results from its Chinese Tencent investment.
Tencent, of which Naspers owns about a third, reported that revenue rose 57% for the six months to June, which beat expectations. Gross profit was up 38%, which was lower than expected.
The rand was at R13.2234 to the dollar from R13.3216 with the dollar flat against the euro at $1.1731 after Moody’s regular update on the South African economy was released in the morning. It was not a ratings announcement.
Moody’s said the South African government’s credit profile was supported by the economy’s relative size and diversification, sound macro-economic policy and fiscal management, and deep financial markets. Constraints include persistently low growth, as business confidence and investment languish, and rising policy uncertainty, it said.
Moody’s kept the outlook on negative, reflecting its view that the risks to growth and fiscal strength arising from the political outlook were tilted to the downside.
Industrials on the JSE were supported by resources, with global miners up, but Kumba Iron Ore dropped 7.93% on sagging Chinese iron ore prices, which fell 1.37% to $72 a tonne.
The market was also eyeing the US Federal Reserve’s open market committee meeting minutes on Wednesday evening, "and the bulls are being corralled in anticipation of an optimistic Fed", said Sasfin Securities bond analysts.
Banks and financials gained on the firmer rand. Retailers were steady ahead of the release of retail sales data for June later in the afternoon.
European markets were firmer with the FTSE 100 gaining 0.62% and the CAC 40 1.04%. The DAX added 0.83%.
At 12.21pm, the all share was 1.09% higher at 55,583 points and the blue-chip top 40 rose 1.22%. Industrials were up 1.29%, resources 1.06%, financials 0.78% and banks 0.66%. The gold index shed 0.91%.
Anglo American rose 1.89% to R216.26 and BHP 1.27% to R232.22.
Kumba Iron Ore was 7.93% off at R180.87.
British American Tobacco dropped 1.36% to R829.86.
Among banks, Barclays Africa gained 0.96% to R150.33 and Nedbank 0.99% to R227.22.
Telkom rose 2.53% to R67.36.
Naspers was up 3.53% to R2,904.07.
Curro recovered 1.18% to R41.99 after falling on Tuesday following the release of mixed interim results.