JSE likely to follow Caterpillar and 3M down
The JSE is likely to follow global markets down on Wednesday.
Asian markets generally took their cue from Wall Street where the S&P 500 fell 1.34% and the Nasdaq index fell 1.7% on Tuesday.
Caterpillar’s share price fell 6.2% to $144.44, despite reporting strong quarterly earnings, a bad omen for its JSE-listed South African agent Barloworld.
Another US blue chip to fall on Tuesday despite releasing strong quarterly results was 3M, whose share price dropped 6.79% to $201.13.
The executives of both industrial companies were concerned about how US President Donald Trump’s threatened trade war with China could affect their businesses.
Tokyo’s Nikkei 225 was down 0.4% and Hong Kong’s Hang Seng index was down 0.84%, but Sydney’s ASX 200 was up 0.6%.
Naspers’s 31%-owned Chinese associate Tencent was down 2.22% to HK$387.80, indicating the top 40’s largest constituent will drag the JSE down on Wednesday.
South32 continued to follow aluminium down, falling 9.6% to A$3.58. On the JSE, South32 closed 1.78% lower at R33.65 on Tuesday.
In Frankfurt, Steinhoff International closed 3.92% lower at €0.15 on Tuesday, which at Wednesday morning’s exchange rate of R15.11 to the euro translated to about R2.27, higher than the R2.19 Steinhoff closed at on the JSE on Tuesday.
The rand was trading at R12.37 to the dollar and R17.28 to the pound at 6.40am.
Ingenuity Property issued a trading statement on Tuesday saying it expected to report on Wednesday that its headline earnings per share (HEPS) for the six months to end-February declined by 67%.
Ingenuity said this drop in earnings was mainly due to the sale of three properties in the matching period causing its income to drop R5.9m. Excluding the three sold properties, its income grew 12%, Ingenuity said.
The group said it also had to pay R4.3m interest on its City Park joint venture loss due to delays in getting redevelopment planning permission for the joint venture.
Vunani said on April 17 that it expected to report on Wednesday that its HEPS for the year to end-February might increase by up to 41%.
Stellenbosch University’s Bureau for Economic Research is scheduled to release its quarterly consumer confidence index sponsored by First National Bank.
Investec Bank economist Lara Hodes said in her weekly note that she expected consumer confidence to have improved from the negative eight points recorded in the fourth quarter of 2017 by about seven points, taking it to negative one.
"Cyril Ramaphosa’s election as president of the ANC and subsequently the republic went a long way towards boosting sentiment, and the business confidence index during the first quarter jumped 11 points to 45. The avoidance of a downgrade by Moody’s rating agency and stronger than expected economic growth will also have supported the rise in consumer sentiment," Hodes wrote.