JSE posts broad-based losses with banks and general retailers faring worst
The JSE closed lower on Wednesday, amid mixed global equity markets and lacklustre local data.
Renewed focus has fallen on SA’s broader political and economic outlook, with some degree of political uncertainty; recent warnings from ratings agency Moody’s also weighed on certain sectors this week.
After releasing a number of reports covering business confidence, the mining sector, banking sector and corporates’ outlook in general earlier this week, Moody’s vice-president and senior sovereign analyst Zuzana Brixiova warned on Wednesday that SA was stuck in a low-growth trap, and that SA was at risk of another downgrade if the government didn’t implement structural reforms.
Finance Minister Malusi Gigaba said on Wednesday that Treasury’s growth projection of 1.3% for 2017 was at risk, citing lower tax collections for the first quarter, which missed their target by R13bn.
The all share fell 0.38% to 56,152.5 points and the top 40 0.37%.
General retailers dropped 1.38%, banks 1.16%, resources 0.75% and the platinum index 0.78%.
Food and drug retailers added 0.96% and the gold index 0.32%.
Local data was disappointing on Wednesday. After plunging from 40 to 29 in the second quarter, the Rand Merchant Bank (RMB) Bureau for Economic Research business confidence index rose by six points to a still low 35 in the third quarter. Almost seven out of 10 respondents remained unsatisfied with business conditions — a troubling outcome "to say the least", RMB said.
Retail trade sales growth slowed more sharply than expected in July, coming in at 1.8% year on year, from June’s 2.9% and against expectations of between 2.4% and 2.7%. While some focus would fall on these figures, the main interest would still lie with the US inflation print for August being released on Thursday, analysts said.
Consumer spending was likely to be supported by low inflation and debt-service costs, but strong growth would be contained by fragile confidence, said Nedbank Group Economic Unit analysts.
The data signalled subdued momentum in the retail sector, and consumer spending was likely to be restrained by private-sector credit dynamics, subsiding wage growth pressure, and persistently depressed confidence, said Investec economist Kamilla Kaplan.
On the JSE, diversified miner Glencore fell 1.56% to R63.10, BHP 1.34% to R245.33, and Anglo American 1.91% to R235.27.
Rand hedge Anheuser-Busch InBev gained 1.09% to R1,601.73 and British American Tobacco 1.01% to R839.17. Naspers was off 0.43% to R2,972.06 in ex-dividend trade.
Industrial group Imperial Holdings was off 1.48% to R189 while Grindrod added 1.85% to R13.80.
Woolworths slumped 3.92% to R58.80 in ex-dividend trade, and Truworths 2.68% to R78.54.
Bidcorp added 2.4% to R294.82.
Trading ex-dividend, Standard Bank fell 2.09% to R158.98. The bank announced on Tuesday that Ben Kruger was stepping down as joint CEO‚ leaving Sim Tshabalala alone at the helm.
Barclay’s Africa dropped 0.71% to R139 and Nedbank 1.96% to R200.
Luxury goods group Richemont was flat at R120.30‚ after earlier reporting that sales for the five months to end-August rose 12% from a year earlier. British American Tobacco gained 1.01% to R839.17.
Jasco Electronics fell 1.52% to 65c‚ after earlier reporting a 61% fall in headline earnings per share (HEPS) in the year to end-June. This was towards the upper end of its recent guidance.
Liquor group Capevin fell 1.07% to R8.31 after earlier declaring a final dividend of 13.6c for the year to end-June, compared with 14.2c in the previous period.
Allied Electronics shed 3.03% to R12.15, despite earlier issuing guidance that HEPS were expected to be between 16% and 36% higher for the six months ended August 31.
Impala Platinum dropped 1.21% to R39.35, ahead of its full-year results to end-June being reported on Thursday. The company said in August that it expected to record a headline loss per share of between R1.25 and R1.50, compared with HEPS of 12c in the previous period.
Aspen lost 2.01% to R285.54, ahead of the release of its final results to end-June on Thursday. The company reported normalised HEPS of R126.37 in the previous period.
Trading ex-dividend Adcock Ingram fell 2.34% to R60.45, while Ascendis Health relinquished 3.44% to R20.50.
US stocks opened slightly lower on Wednesday, amid mild profit-taking as investors found few catalysts to keep pushing shares higher, reported Dow Jones Newswires.
Shortly after the JSE closed, major US equity markets were flat, while in Europe the FTSE 100 had lost 0.12% but the CAC 40 had added 0.25% and the DAX 30 0.19%.
Gold was off 0.72% to $1,322.26 an ounce and platinum 0.62% to $981.3. Brent crude had gained 0.7% to $54.64 a barrel.