MARKET WRAP: JSE closes weaker as Reserve Bank keeps rates on hold
The JSE all share closed weaker on Thursday, as the Reserve Bank kept the repo rate unchanged at 6.75%, as expected, with it again flagging a volatile rand as the main upside risk to inflation.
Shortly after the JSE’s close Fitch re-affirmed SA’s long-term foreign and local currency debt ratings at BB+ and maintained its stable outlook.
"Domestic event risks, including rating agency reviews and the economic policy implications of the ANC electoral conference, are likely to dominate rand movements over the coming weeks," Bank governor Lesetja Kganyago said on Thursday.
Volumes were a little lower than average, at R17bn, due to the Thanksgiving holiday in the US on and Labour Day in Japan.
Naspers was the main loser on the day, closing 4.06% lower at R3,741.75. It is still 85.7% up for the year, but 2.69% lower for the week after a good run last week.
Other rand hedges generally did well on the day, as the local currency weakened marginally against the dollar. Banks and retailers were higher, but property stocks were lower.
The all share closed 0.75% lower at 60,298.20 points and the blue-chip top 40 shed 0.91%. Industrials were 1.54% lower and property 0.39%. General retailers rose 1.02%, the gold index 0.77%, banks 0.64%, resources 0.63%, and food and drug retailers 0.51%.
British American Tobacco rose 0.57% to R932.90 and Richemont 0.39% to R122.87.
Standard Bank rose 1.31% to R170.69 and Nedbank 1.2% to R215.
Retailer Truworths added 2.82% to R76.52, TFG 2.2% to R152.28 and Massmart 1.41% to R110.62.
PPC closed 3.03% higher at R6.80 after reporting interim revenue to end-September grew 1% to R5.19bn from R5.16bn, while after-tax profit jumped to R304m from R58m.
Property group Nepi Rockcastle shed 0.56% to R208.
Clover Industries rebounded 5.32% to R13.27.
At 6pm, the rand was at R13.9065 to the dollar from Wednesday’s R13.8253, barely changed from before Kganyago started his speech and after the Fitch announcement.
A firmer euro supported the local currency, with the greenback on the back foot following the release of dovish minutes from the US Federal Reserve earlier in the day.
Local bonds were marginally firmer. The R186 was bid at 9.345% from 9.390% ahead of the credit rating announcements by rating agencies Moody’s and S&P Global on Friday evening, which may result in a further drop in SA’s creditworthiness.
The top-40 Alsi futures index lost 0.91% to 54,350 points. The number of contracts traded was 18,904 from Wednesday’s 18,427.