MARKET WRAP: JSE ends lower as retail sales data disappoints
Weak retails sales data for July dragged the JSE all share down on Wednesday with the market already under pressure following the release of downbeat business confidence numbers, and Moody’s assigning a negative outlook for SA’s financial companies.
Standard Bank, trading ex-dividend, fell 2%. It was announced on Tuesday that Ben Kruger would step down as joint-CEO of the group, leaving Sim Tshabalala alone at the helm.
Annual growth in retail sales moderated to 1.8% in July, lower than the market’s forecast of 2.9%, and from 3.2% in June.
After plunging from 40 to 29 in the second quarter, the Rand Merchant Bank Bureau for Economic Research business confidence index rose by six points to a still low 35 in the third quarter.
Moody’s said it had assigned its negative outlook on deteriorating profitability and asset risk for SA’s insurance sector as insurers’ creditworthiness would likely remain under some pressure over the next 12 to 18 months due to subdued economic conditions.
The all share closed 0.38% lower at 56,152.50 points and the blue-chip top 40 shed 0.37%. General retailers lost 1.38%, banks 1.16%, the platinum index 0.78%, resources 0.75%, and financials and property both fell 0.38%. Food and drug retailers added 0.96%, and the gold index 0.32%.
In general retailers, Woolworths dropped 3.92% to R58.80, in ex-dividend trade, while Truworths gave up 2.68% to R78.54. Food retailers Spar rose 0.60% to R167.52 and Shoprite 0.45% to R212.75.
Standard Bank was 2.09% lower at R158.98, Nedbank 1.96% at R200, and Capitec 0.54% at R898.12.
Sanlam relinquished 0.75% to R67.89.
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.
The rand lost more than 1% to the dollar as concern about political developments resurfaced after a court found the ANC’s 2015 conference in KwaZulu-Natal unlawful. Analysts have indicated that political tension is likely to increase ahead of the governing party’s December conference, putting further pressure on the economy.
Soon after the JSE’s close the rand was at R13.1672 to the dollar from Monday’s R13.0091.
Local bonds were largely unchanged with the R186 last bid at 8.435% from 8.445%.
The top-40 Alsi futures index lost 0.24% to 49,763 points. The number of contracts traded was 28,241 from Tuesday’s 25‚380.