JSE weakens in high-volume trade as rand hedges come under pressure
The JSE closed weaker on Friday, with local focus squarely on the start of the ANC elective conference on Saturday.
Volumes on the local bourse were much higher than usual, at R43bn compared to the usual daily average of R20bn.
The rand was well supported on Friday, to below R13.30 to the dollar, shortly before the JSE closed, and after a series of legal setbacks for ANC presidential candidate Nkosazana Dlamini-Zuma.
This put rand hedges under pressure, including Naspers, which lost just more than 3%. Banks failed to capitalise on rand weakness, while gold and platinum miners jumped.
The all share fell 0.75% to 57,412.8 points and the top 40 1.06%. Industrials gave up 1.44%, food and drug retailers 1.07% and banks 0.41%.
The ANC conference is expected to generate volatility in the local currency, which has surprised analysts with its stability during the week.
Early signs of a win for Cyril Ramaphosa — the more investor-friendly option — had provided support for the rand, said Capital Economics researchers. But while Ramaphosa was popular within the party as a whole, the election would be decided by delegates who may opt for his "more leftist" opponent, Dlamini-Zuma.
The rand also received a boost after the National Energy Regulator of SA (Nersa) said it had only granted Eskom a 5.23% tariff increase for the 2018-19 financial year. Eskom had sought a 19.9% increase, which many analysts had said would kill both economic growth, and SA’s chances of escaping further credit-ratings downgrades.
Local bonds staged a small rally after Nersa’s announcement, despite Eskom saying it would await reasons for the decision, then decide on a way forward.
Rand hedge British American Tobacco dropped 2.46% to R870.60, Anheuser-Busch InBev 1.7% to R1,466.50, and Richemont 1.01% to R119.15.
Naspers fell 3.09% to R3,310.
Steinhoff slumped 9.98% to R8.03, having earlier announced banks had opted to sell-off 98.4-million of former CEO Christo Wiese’s shares to enforce their security rights. Most companies associated with Steinhoff, however, gained on Friday, including Tradehold, which added 51.2% to R21.35.
Steinhoff Africa Retailer (Star) jumped 10.45% to R18.50, despite earlier confirming it had reached an agreement to refinance R16bn in loans from Steinhoff International. The parent company had said last week it would seek better terms on the loans.
PSG dropped 2.64% to R243.41, with Steinhoff earlier saying it had raised about R4.7bn by reducing its interest in the group.
Shoprite dropped 5.74% to R210.74 and Clicks 1.22% to R173.60.
Gold Fields gained 5.87% to R53.17 and Sibanye-Stillwater 3.47% to R15.49.
Northam Platinum leapt 8.2% to R51.04.
Shortly after the JSE closed the Dow was up 0.44%, while European markets were mixed. The FTSE 100 was up 0.22% while the CAC 40 was off 0.39%.
Platinum had gained 0.21% to $884.40 an ounce and gold 0.18% to $1,255.16, while Brent crude was off 0.27% to $63.23 a barrel.