MARKET WRAP: JSE suffers fourth week of losses in risk-off trade
The rand gained for a second consecutive day after dropping to 11-month lows this week
The JSE closed in negative territory for a fourth consecutive week on Friday as global-growth concerns push investors to perceived safe havens such as gold and the dollar.
Most global markets made some sort of recovery on the day, after investors shied away from riskier assets this week amid growing fears of a global recession and the protracted US-China trade war. On Friday, China’s state planner hinted at the possibility of a stimulus plan for its economy, amid speculation of a global, monetary policy easing cycle.
Soon after the JSE closed, the Dow was 1.08% higher at 25,855.54 points. In Europe, the FTSE 100 had gained 0.72%, France’s CAC 40 1.22%, and Germany’s DAX 30 1.37%.
Earlier, the Shanghai Composite rose 0.29% and Hong Kong’s Hang Seng 0.94%, while Japan’s Nikkei 225 was flat.
The rand entered its second day of recovery, after dropping to 11-month lows this week. At 5.30pm, it had firmed 0.33% to R15.2277/$ and 0.46% to R16.8989/€, while it had weakened 0.14% to R18.4964/£. The euro had weakened 0.12% to $1.1098.
Gold was 0.97% lower at $1,508.53/oz, while platinum had gained 0.18% to $841.84. Brent crude added 0.33% to $58.51 a barrel.
The JSE all share and the top 40 ended the day flat, with the local bourse closing at 53,874.50 points. Banks fell 0.53% and resources 0.31%.
The all share was down 2.99% for the week, cutting its 2019 gains to just 2.16%.
Steinhoff slumped 11.86% to R1.04 after its former CEO Markus Jooste said the company’s $56m claim against him was “vague and embarrassing”, Bloomberg reported on Friday.
On Thursday, President Cyril Ramaphosa signed into law the controversial National Credit Amendment Bill — which aims to provide relief for heavily indebted consumers who earn less than R7,500 a month. Banking and retail stocks ended lower with analysts saying the bill could have an effect on their business.
Capitec fell 2.56% to R1,095.43, Nedbank 2.68% to R217.54, and Absa 2.12% to R148.88.
Mr Price lost 2.45% to R171.68, TFG 3.26% to R145, and Lewis 1.82% to R32.30.
Sasol slumped 4.73% to R265 after the company said on Friday that it would have to delay the release of its annual results after an investigation found “possible Lake Charles Chemicals Project control weaknesses”.
City lodge relinquished 2.56% to R95 after it reported in its full-year results that its average occupancy fell to 55% from 59% the previous year.
Sanlam was flat at R69.90. The financial services company said earlier that its headline earnings decreased by 25% to 35% for the six months to end-June. Sanlam said its interim earnings were affected by once-off charges linked to its broad-based BEE entity.
Truworths slumped 7.48% to R53.57. On Thursday, the retailer reported a 74% decrease in profits for the full year to end-June. The company’s shares dropped to their worst level in nine years.
Resilient rose 3.01% to R60.27 after earlier declaring a final dividend of 267.4c a share for the six months to end-June.
Stadio Holdings shot up 16.6% to R2.74 after it said it expects its headline earnings per share to be between 4.8c and 5.4c, an increase of between 37% and 54% for the six months to end-June.
Discovery gained 4.41% to R110.66 after the company said the National Health Insurance Bill was unlikely to have “any material impact on the medical scheme administration business of Discovery Health for the foreseeable future”.