MARKET WRAP: JSE edges higher ahead of Brexit vote

The JSE edged higher on Tuesday, while global markets were buffeted about by news headlines around Brexit.

Banks benefited from a firmer rand and a market-pleasing set of results from FirstRand, but all eyes were on the UK, where a crucial Brexit vote takes place later.

The all share firmed 0.21% to 55,699.8 points and the top 40 rose 0.16%. Banks gained 1.44%, gold miners 1.3% and financials 0.9%. Platinums fell 1.76%.

UK MPs are expected to vote at about 10pm South African time on Prime Minister Theresa May’s Brexit deal. Sentiment was boosted earlier by reports of concessions by the EU, but these were called into question later, and the pound weakened sharply as a result.

Brexit, along with the US-China trade war and global monetary policy, has been a major factor in market activity over the past 18 months. Volatility in the pound is likely to continue in the coming days, ahead of a March 29 Brexit deadline.

As the JSE closed the rand had gained 0.7% to R18.7668/£ and 0.26% to R14.3012/$. Gold was up 0.25% to $1,296.70/oz and platinum 1.25% to $830.01. Brent crude added 0.6% to $67.04 a barrel.

Oil continued its push higher on Tuesday amid reports that Saudi Arabia was planning to extend deep supply cuts. A nationwide electricity blackout also continues to hobble production in that country.

Local news took a back seat in the main, although there were some corporate results to give the market some direction.

FirstRand gained 2.04% to R63.39, having earlier reported that that normalised earnings in the six months to end-December rose 7% to R13.3bn, thanks largely to gains by FNB. The bank raised its interim dividend 7% to R1.39 per ordinary share, though normalised return on equity fell slightly, from 22.5% a year earlier to 22.3%.

MTN added 2.13% to R94.90, bolstered by an upbeat assessment of the profitability of its Nigerian division by US investment bank JP Morgan.

Group Five was at 89c as news broke it would be delisted. The construction group has filed for business rescue.

Aspen jumped 10.25% to R113. It plunged 28.69% on Friday when it said normalised headline earnings in the six months ended December fell 9% to R3.6bn, as the financing costs of its high debt levels mount.

Tongaat Hulett slumped 9.86% to R16, bringing its losses for the week so far to 57%. It warned on Friday that it may need to restate previous results, after discovering accounting practices that may require remedial action.

The Dow was last seen down 0.11% to 25,625.31 points, with aircraft manufacturer Boeing under pressure for the second consecutive day. In Europe, the FTSE 100 was up 0.14% and the CAC 40 0.12%, while the DAX 30 had lost 0.13%.

gernetzkyk@businesslive.co.za