MARKET WRAP: JSE closes flat but extends losses to fourth consecutive week
JSE indices are mostly little changed amid a lack of clear direction from global markets and general concerns about geopolitical risk
The JSE closed flat on Friday, but ended the week 2.58% lower, after neither global markets nor the rand gave the local bourse a clear direction.
The all share fell 0.08% to 52,093 points and the top 40 lost 0.09%. Financials gained 0.3% and food and drug retailers 0.12%. Gold miners lost 2.21%
Chinese economic data for the third quarter earlier in the day disappointed, adding to a generally risk-off mood on global markets as investors eyed developments in Europe.
Italy and the EU seem set to clash over the former's budget deficit, an issue that put Italian and German bonds under pressure on Friday.
The European Commission said on Thursday that a draft 2019 budget from Italy was in “particularly serious noncompliance” with EU rules, setting the stage for a possible unprecedented rejection of the country's fiscal plan, Reuters reported.
Local focus next week is expected to be squarely on the medium-term budget policy statement on Wednesday, which is being viewed as a key test of the government's ability to both rein in the deficit and stimulate the economy via spending.
Staying the course of measured fiscal consolidation while trying to stimulate economic growth will prove a difficult task, said FNB chief economist Mamello Matikinca. "Based on our growth projections, we expect the main budget deficit for the current financial year to be widened by about 0.3% to -4.1% of GDP before moderating to -3.9% of GDP in 2020-2021. Net debt estimates are likely to have been revised marginally higher," he said.
Consumer and producer inflation are also due on Wednesday and Thursday respectively, giving direction to interest-rate sensitive shares such as banks and retailers.
On Friday, AB InBev gained 0.76% to R1,210.94, while Richemont lost 0.75% to R102.02.
Verimark gave up 1.09% to 91c, ahead of its interim results to end-August on Monday. The company said in September that it expected to report a loss of between R4m and R4.5m for the period, compared to the prior period's profit of R2.2m.
Clicks jumped 4.94% to R166.60, ahead of its results for the year to end-August next week. The retailer posted solid headline earnings per share (HEPS) growth of 14% in the six months to end-February.
Intu Properties jumped 11.88% to R37.20. having announced earlier that an “indicative offer” to take it private from the Peel Group, the Olayan Group and Brookfield Property Group had been raised to £2.15 from £2.05 per share, an increase of 5%.
Telkom slipped 3.09% to R51.07.
Clover surged 18.44% to R16.70, after earlier informing the market that a third party was interested in acquiring its entire share capital.
Shortly after the JSE closed the Dow was up 0.68% at 25,5551.91 points, while in Europe, the FTSE 100 was up 0.49%, while the CAC 40 had fallen 0.44% and the DAX 30 0.25%.
At the same time, platinum had risen 0.65% to $833.55 an ounce and gold 0.13% to $1,227.25. Brent crude was 1.5% higher at $80.49 a barrel.