MARKET WRAP: JSE slips as rand pushes to R14.40/$

The JSE closed lower on Thursday, with a stronger dollar putting pressure on local banks and financials.

The euro weakened after the European Central Bank (ECB) announced fresh stimulus measures to counter flagging growth in the eurozone. The ECB also pushed back its forward guidance on interest rates, which will now remain unchanged in 2019.

The rand was about 1% weaker at R14.4087/$ as the JSE closed, but was faring a little better against the euro and the pound. European banks were sharply down after the ECB’s announcement.

The all share fell 0.39% to 55,857.9 points and the top 40 0.46%. Banks lost 1.69%, gold miners 2.19%, and financials 0.86%.

Local news was a little downbeat. The Reserve Bank said that SA’s current account deficit narrowed to 2.2% of GDP in the fourth quarter of 2018, from 3.7% in the third quarter. Although a smaller deficit is good news for the rand, a closer look at the data, however, showed that this was due to weak local demand rather than economic strength, said Capital Economics senior emerging-markets economist John Ashbourne.

The National Energy Regulator of SA (Nersa) earlier announced that electricity tariffs will rise by 9.41% in April, less than the 15% sought by Eskom. President Cyril Ramaphosa also said that the ANC would push ahead with a resolution to nationalise the Reserve Bank, but he promised it would remain independent from government interference.

Naspers fell 2.65% to R3,130.

MTN surged 18.06% to R89.80. It said earlier that headline earnings per share (HEPS) for the year to end-December 2018 increased to 337c from 182c in 2017. The network operator has suffered setbacks in a number of its major markets, including Nigeria and Iran, and remains 8% down so far in 2019.

Standard Bank lost 3.07% to R182.43. It said HEPS rose 7% to R17.48 in the year to end-December, with the group raising its dividend by a similar margin, to R9.70.

Sanlam gained 1.37% to R78.38, after it said that normalised HEPS fell 10% in the year to end-December, although the financial services group upped its dividend 8% to R3.12 compared to the prior comparative period.

Old Mutual gave up 1.02% to R22.36, Discovery 1% to R149 and MMI 1.14% to R15.60.

Shortly after the JSE closed, the Dow was 0.72% lower at 25,481.64 points, while in Europe, the FTSE 100 had fallen 0.68%, the CAC 40 0.45% and the DAX 30 0.76%.

Gold was down 0.15% to $1,283.30/oz and platinum 1.06% to $818.91. Brent crude was 0.21% higher at $66.04 a barrel.

gernetzkyk@businesslive.co.za