JSE could follow global markets lower on Thursday
SA’s main stock exchange, which was closed on Wednesday as the country voted, could follow global markets lower on Thursday as the trade dispute between the US and China heats up.
US President Donald Trump said on Wednesday China “broke the deal” between the world’s two largest economies, Bloomberg reported. This led him to decided to raise tariffs, he said at a rally in Florida.
Traders had previously expected an imminent resolution to the trade impasse, which is said to be weighing on global economic growth and stocks.
Hong Kong’s Hang Seng Index and Korea’s Kospi were 2% down on Thursday, while Japan’s Nikkei 225 fell 1%. Australia’s main benchmark bucked the trend, lifting 0.3%.
JSE heavyweights Naspers and BHP Group may open lower on Thursday.
Tencent, Naspers’s main asset, fell 1.6% in Hong Kong, while BHP was 1% lower in Australia.
A handful of company results are due on the JSE on Thursday, including quarterly production numbers from AngloGold Ashanti, quarterly financials from Sappi and MTN, annual results from Altron and Equites Property Fund, and interim numbers from Indluplace Properties.
Altron said recently its headline earnings per share in the year to end-February rose by up to 62%.
Indluplace warned that its dividend per share for the six months to end-March would fall by 23%.
Meanwhile, Steinhoff’s shares are likely to react to the company’s 2017 financial results, which were published after the market closed on Tuesday following a lengthy delay.
The company’s shares fell more than 8% in Frankfurt after it said the value of its assets had fallen by about R250bn compared with previously released 2016 numbers.
After the write-downs, the retailer, which uncovered “accounting irregularities” in late 2017, was left with a €4.03bn loss, a swing of nearly €5.5bn over the previous period.
Stats SA is due to report mining and manufacturing data for March on Thursday, while the SA Reserve Bank will publish statements of assets and liabilities.
Investors will also be keeping a close eye on SA’s election results.
At about 7am on Thursday, the ANC was in the lead with 53.89%, with the DA in second place at 27.14% and the EFF in third at 7.83%.
A strong win for the ANC would likely boost stocks and the rand, analysts have said.
Elsewhere, the US is due to report jobless claims and a producer price index reading.
The rand was slightly weaker on Thursday morning after strengthening overnight.
It was at R14.39/$, R18.72/£ and R16.10/€.
“We expect some volatility in the rand as the election results become known, with an intraday range of R14.30 to R14.48,” said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.