MARKET WRAP: JSE snaps losing streak on Naspers, but overall picture still negative
Retailers and banks recover on the stronger rand as the JSE all share posts its third consecutive week in the red
The JSE ended a disastrous week on a high note on Friday, closing more than 2% up as risk-on sentiment took hold of markets again, spurred on by upbeat Chinese economic numbers.
The market was also supported by a strong opening on the Dow, rising 1.03% at the JSE’s close, as the latest quarterly banking earnings numbers pleased the market.
Gains on the JSE were led by Naspers, which recovered more than 8% in a relief rally and paried losses for the year so far to 16%. At one point in the week it was down more than an annual 20% as part of a global selloff in tech stocks with its Chinese Tencent investment turning sour.
Analysts said it would take more than a one-day improvement in Naspers for them to increase exposure to the stock. “We’ve been nervous on Naspers for many months now and have minimal exposure to passive strategies where there is big Naspers exposure,” said Progressive Wealth analyst Peter-John Marais.
Tencent’s rise has been too aggressive amid the uncertainty around the regulation of the gaming industry by the Chinese authorities, Marais said.
The all share closed 2.38% up at 53,473.10 points and the top 40 2.65%. Industrials rose 3.76%, general retailers 3.39%, banks 3.32%, food and drug retailers 2.77% and financials 2.21%. However, the all share ended the week 1.72% lower, its third successive week in the red.
In the week ahead, market pundits are set to focus on retail sales for August, due on Wednesday, followed by mining production figures for the same month on Thursday.
Choppies, Pick n Pay and Dis-Chem are scheduled to report, with Choppies first up on Monday. The Botswana-based retailer is trading under a cautionary on delayed annual results to end-June. It closed 1.2% up at 84c on Friday.
Pick n Pay said earlier that headline earnings per share (HEPS) to end-August will rise between 75% and 85%. It will report on Tuesday and closed 0.42% higher at R65.18 on Friday.
Dis-Chem will report interims to end-June on Wednesday. In an earlier four-month update it said earnings for the half-year are set to rise between 8.1% and 13%. It firmed 2.76% to R29.80 on Friday.
Holding company PSG will report interims to end-August on Tuesday. It rose 2.74% to R216.27 on Friday, after informing the market that interim HEPS will rise between 39.1% and 40.5%.
IT group Datatec figures are due on Thursday, with interim HEPS expected to be marginally up from a loss in the comparable period a year earlier. It closed 2.27% higher at R22.51 on Friday.
The rand held on to firmer levels at R14.4431 to the dollar from R14.6288. The R186 was last bid at 9.23% from 9.265%.