MARKET WRAP: JSE starts week firmer as rand aims for R12/$ break
The JSE closed firmer on Monday, as banks and financials rallied with the rand poised to break through R12 to the dollar and as favourable political developments supported sentiment.
Miners ended the day lower on the firmer rand and subdued commodity prices.
Global equity markets were mixed, with the FTSE 100 losing 0.11% but the DAX 30 gained 0.20%. The Dow was flat as US markets took the partial US government shutdown in their stride.
The ANC’s national executive committee resolved to recall President Jacob Zuma, whose two terms in office have been dogged by controversy.
Separately, the government announced the appointment of the new Eskom board, long considered a key risk to SA’s already strained finances.
The all share closed 0.27% higher at 61,078.30 and the blue-chip top 40 added 0.2%. Banks rose 2.48%, financials 0.98%, general retailers 0.97% and industrials 0.22%. The gold index shed 2.23%, resources 0.46% and platinum 0.15%.
Rand hedge Richemont fell 1.93% to R111.85 and Anheuser-Busch InBev 1.59% to R1,396.60.
Gold Fields added 3.15% to R50.50 and Sibanye-Stillwater 2.69% to R15.20.
Standard Bank gained 2.78% to R199.91, FirstRand 3.15% to R66.50 and Barclays Africa 2.23% to R183.
Steinhoff International gained 7.75% to R8.20.
Nepi Rockcastle shed 2.78% to R165 and Greenbay 3.06% to R1.90.
The rand was marginally weaker at R12.1107 to the dollar after the JSE’s close after hitting a two-and-a-half year best level of R12.0136 in intraday trade.
An early Zuma exit could see the rand strengthen to R11.70 to the dollar, and then move towards R11, providing that ANC president Cyril Ramaphosa could assume the presidency without any political conditions that hampered reform efforts, said Investec chief economist Annabel Bishop.
Barclay’s Research analysts said they had changed their outlook for agency Moody’s March ratings decision, to no downgrade. There was now no meaningful catalyst for material near-term rand depreciation.
The local bond market was firmer with the R186 bid at 8.39% from 8.48% as the market followed the strong rand and brushed off a potential suspension in Eskom bond trades.
Eskom is facing a 14-day recall on its $3.75bn loan, which could trigger a recall on Eskom’s total debt of R350bn.
The top-40 Alsi futures index gained 0.44% to 54‚720 points. The number of contracts traded was 13‚889 from Friday’s 11‚841.
With Andries Mahlangu