JSE jumps on Zuma exit, as market takes positive view on economic prospects
The JSE was sharply higher at the opening on Thursday with broad-based gains, ranging from banks to miners, following the overnight resignation of Jacob Zuma as head of state.
Market focus shifted to the expected inauguration of ANC president Cyril Ramaphosa as president later in the day. Ramaphosa is set to deliver the delayed state of the nation address on Friday, with the budget scheduled for February 21.
Despite some analysts warning that the economy will not improve overnight under Ramaphosa’s leadership, undoing Zuma’s disastrous economic record, others believe short-term benefits might soon become evident.
"Should the state of the nation address and the budget speech go down without too much criticism, one can almost assume that Moody’s will hold off from downgrading SA’s credit rating for the time being," said Peregrine Treasury Solutions analyst Bianca Botes.
The rand firmed to a two-and-a-half year high of R11.6559 to the dollar after the announcement, and was at R11.66 at the JSE’s opening.
The local market was also following higher global markets, as the Dow closed 1.03% up at 24,893.49 points on Wednesday.
The Dow initially struggled to make headway as higher than expected inflation data raised the spectre of a more hawkish stance by the US Federal Reserve on interest rates. But retail sales unexpectedly declined by 0.3% in January, with the market taking the view the Fed would remain cautious.
Asian markets were firmer, with the Nikkei 225 rising 1.47% and the Hang Seng 1.97%.
At 9.30am the all share was up 2.51% to 58,839 points and the top 40 added 2.73%. Banks and resources were both up 3.05%, the gold index 3.23%, general retailers 2.89%, industrials 2.43%, financials 2.41% and platinums 1.81%.
Anglo American rose 3.03% to R285.55 and BHP 3.74% to R263.20.
Kumba Iron Ore lifted 3.47% to R358.97.
DRD Gold rocketed 7.34% to R3.80 after reporting a 27% increase in interim operating profit to R219.9m. It also declared an interim dividend of 5c per share.
Harmony rose 4.84% to R24.47.
FirstRand firmed 3.76% to R73.46.
Shoprite rose 2.5% to a record R258.73.
Growthpoint added 1.72% to R28.98, Redefine 2.49% to R11.51 and Resilient 0.61% to R96.59.
Naspers was up 3.61% to R3,284.35.