JSE opens flat as emerging markets remain under pressure
Local banks were sharply down despite Moody’s relatively upbeat report, as property stocks continued to take strain
The JSE opened flat on Wednesday with banks and financials retreating, despite ratings agency Moody’s relatively positive assessment of the sector on Tuesday.
Moody’s changed its outlook on SA’s banking system to stable from negative but warned that the challenging operating environment "will suppress business opportunities and loan demand and exert pressure on banks’ loan quality".
Asian trade was risk-off despite the Dow closing 0.44% higher on Tuesday. The Nikkei 225 lost 0.27% and the Hang Seng 0.51%.
Naspers edged lower in early-morning trade after Tencent rose marginally in Hong Kong trade.
Miners were up on the slight slide in the rand, despite lower metal prices and Brent crude slipping 0.37% to $79.10 a barrel.
Property stocks remained on the back foot as the issues at Resilient remained unresolved. The group announced that a board committee would investigate investors’ unhappiness about the sharp drop in its share price. Institutional investors have called for an independent investigation.
The rand weakened to R15.1460 to the dollar from R15.0551.
Negative emerging-market sentiment shows little sign of abating. "There is still sanctions talk against Russia, the trade tensions between the US and China are very much in evidence and the Argentinian peso is on a steep slippery slope," TreasuryOne trader Andre Botha said.
On a positive note, the Turkish lira showed some recovery on Tuesday amid expectations that the Turkish central bank was set to hike interest rates. But it was again under pressure on Wednesday morning.
At 9.35am the all share had risen 0.05% to 56,200.40 points. The top 40 also gained 0.05%. Resources rose 1.56%, the gold index 1.35% and platinums 0.83%. Banks shed 1.61%, general retailers 1.57%, financials 0.82% and property 0.58%.
BHP rose 1.73% to R297.66, Anglo American 1% to R291 and Sasol 1.89% to R567.50.
British American Tobacco dropped 1.07% to R692.52.
Absa dropped 2.82% to R149.78 and Standard Bank 2.39% to R173.29.
MMI Holdings lost 1.75% to R16.28.
Resilient was down 0.46% to R53.80 and Fortress B 0.19% to R15.58.
Naspers dropped 0.10% to R3,085.05.
Clover Industries gained 2.69% to R15.29. Operating profit rose 94.3% to R611m for the year to end-June.