SA’s new cabinet could give JSE a small boost on Thursday
SA stocks may receive a small boost from President Cyril Ramaphosa’s new cabinet on Thursday, as Asian stocks edge lower.
On Wednesday night, Ramaphosa announced a reduced executive, with Tito Mboweni returning as finance minister and Pravin Gordhan remaining in the public enterprises portfolio.
In a surprise move, the president also included former Cape Town mayor and leader of the Good party, Patricia de Lille, as minister of public works and infrastructure.
“We struggle to see where there are real economic reformers, policy wonks and implementers entering cabinet, and there are some poor decisions on merging energy and mining, meaning we don’t see this cabinet as ‘pro-growth’ but as largely status quo,” said Peter Attard Montalto, head of capital markets research at Intellidex.
“The bar for this cabinet reshuffle, however, was low,” Montalto said, adding that the market had wanted to see “key names out and Gordhan and Mboweni remain”, along with “some shrinkage”.
“That hurdle has been met and, as such, we can see asset prices trade a little on the front foot from here.”
Hong Kong’s Hang Seng Index was 0.4% down on Thursday after US stocks closed lower overnight. Japan’s Nikkei 225 fell 0.5% and Australia’s main benchmark lost 0.8%, though Korea’s Kospi rose 0.4%.
Chinese internet and gaming giant Tencent, which is about 31% owned by Naspers, rose 0.4% in Hong Kong. In Australia, JSE-listed BHP Group fell 1.6%.
Life Healthcare Group is due to report financial results for the six months to end-March on Thursday, having warned recently that earnings would fall.
Nampak is also scheduled to report, as is Stefanutti Stocks. The construction firm has warned that it will report a headline loss per share of between 65c and 75c for the year to end-February.
Meanwhile, Taste Holdings is expected to report a headline loss per share of between 24.8c and 26.4c for the year to end-February.
Stats SA is due to publish trade data for March, the producer price index (PPI) for April, and construction materials price indices.
Later in the day, the US will publish consumer spending and jobless claims data, as well as first-quarter GDP readings.
The rand was firmer on Thursday morning in the wake of the cabinet announcement, at R14.62/$, R18.47/£ and R16.28/€.