US President Donald Trump. Picture: REUTERS/Jonathan Ernst
US President Donald Trump. Picture: REUTERS/Jonathan Ernst

The JSE is likely to open sharply lower on Monday morning on renewed concerns that trade negotiations between the US and China are faltering.

At the weekend, media reports read that US President Donald Trump has threatened to raise tariffs on $200bn of Chinese imports from 10% to 25% as trade talks are progressing “too slowly”.

The Chinese delegation in the US could even consider cancelling bilateral talks, according to the Wall Street Journal.

On Monday, the Shanghai Composite index was as much as 5.2% lower, while Hong Kong’s Hang Seng index was down 3.3%. Singapore’s main benchmark fell 3.6% and Australia’s 0.9%.

Chinese media and gaming giant Tencent fell 4% in Hong Kong, implying a weak start for major shareholder Naspers.

BHP Group was down 0.7% in Australia.

On the JSE, Redefine Properties is due to report financial results on Monday, as is African Equity Empowerment Investments (AEEI).

AEEI said last week its headline earnings per share in the six months to end-February rose 27%-47%. Normalised headline earnings per share more than doubled.

The Standard Bank purchasing managers’ index is due on Monday, while the EU is scheduled to release retail sales data for March.

The rand was slightly stronger on Monday morning, trading at R14.48/$, R18.99/£, and R16.20/€.

But Trump’s threats means markets will return to safe-haven assets, said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.

“Emerging market currencies will bear the brunt,” Botes said.

“With the escalation of the trade war, we can expect pressure on the rand today.”

The local currency was likely to trade R14.42-R14.60 to the dollar, she said.

hedleyn@businesslive.co.za