MARKET WRAP: JSE led higher by rand hedges and diversified miners

The JSE firmed on Tuesday, with gains mostly due to a strong performance by rand hedges and diversified miners.

Improved global sentiment supported the oil price, to the benefit of local diversified miners. US and European equity markets pushed higher, although Asian markets earlier were mixed.

The rand was weaker on Tuesday, down 0.69% to R14.4135/$ as the JSE closed. It had firmed, however, 1.3% on Monday.

The banking index was weighed down by Capitec on Tuesday, which fell 1.95% to R1,282.05, ahead of its full-year results to end-December on Thursday.

The all share rose 0.49% to 55,638.4 points and the top 40 was 0.43% up. Platinums added 1.41% and the resources index 1.19%. Gold miners fell 1.18% and banks 0.2%.

Local data earlier was somewhat positive, with Statistics SA saying that the number of employed South Africans rose by 87,000 in the fourth quarter of 2018 — the first increase in six months.

The figures, however, suggested that wages did not rise as fast as inflation in the fourth quarter, said FNB economist Siphamandla Mkhwanazi. “With higher taxes in 2019, predominantly due to fiscal drag, combined with an uninspiring employment outlook, which could be made worse by load-shedding, these numbers reinforce our view that households’ disposable incomes will remain under pressure in 2019.”

Global market focus was on Brexit developments, with the pound firming despite the UK parliament voting on Monday to take over Brexit negotiations from Prime Minister Theresa May. A series of votes on how to proceed is now expected on Wednesday.

Reports have suggested May could soon resign, in exchange for support from those within her party that have previously opposed her draft withdrawal agreement.

Shortly after the JSE closed the Dow was up 0.84% at 25,731.57 points, while in Europe, the FTSE 100 had added 0.4%, the CAC 40 0.87% and the DAX 30 0.61%.

Gold was 0.45% lower at $1,316/oz and platinum 0.22% down at $859.13. Brent crude was 1.07% higher at $67.96 a barrel.

Diversified miner Anglo American added 2.36% to R378.14 and BHP 1.46% to R339.88.

Rand hedge AB InBev gained 2.8% to R1,185.73 and British American Tobacco 1.16% to R586.59.

MTN closed 0.11% lower at R90.50, after earlier falling as much as almost 7%, amid reports that Nigerian government lawyers had accused it of tax evasion.

Gemfields rose 5.88% to R1.80.

PPC fell 1.1% to R4.50. Earlier, ratings agency S&P Global Ratings downgraded the cement producer's credit rating, citing weaker profit and therefore debt-reduction prospects.

Alexander Forbes added 2.4% to R4.70. It said earlier it planned to sell its insurance businesses.

Ayo Technology slipped 6.25% to R15, despite the North Gauteng High Court earlier declaring that a notice issued to Ayo by the Companies and Intellectual Property Commission (CIPC) to repay R4.3bn to the Public Investment Corporation was unlawful. The PIC, does, however still intend to recoup the money.

gernetzkyk@businesslive.co.za