JSE may find support from risk-on trade as Naspers weighting drops
Positive Asian markets and continued interest in the rand should support the local bourse a little, as Naspers’s new unit lists in Europe
The JSE should find some support from a positive stance towards risk assets on Wednesday morning, with Asian markets higher as investors consider forthcoming US-China trade talks.
All eyes will be on market heavyweight Naspers, which is due to list its internet assets in Amsterdam under new subsidiary Prosus, later on Wednesday. This will reduce the JSE weighting of Africa’s largest company by market capitalisation.
Tencent was up 0.7% in Hong Kong. Naspers owns just under a third of the WeChat owner, and this stake will now fall within Prosus.
Asian markets were positive on Wednesday. High-level talks between the US and China are scheduled for October, while equity markets have also found support from the expectation that large economies are gearing up stimulus packages to address flagging growth rates.
There is no shortage of theories why equity markets are so resilient in the face of so much adversity, said Vanguard Markets managing partner Stephen Innes in a note. “The US-China tug of war will continue, but there is growing sense that US-China sentiment may be shifting to a state of trade war neutrality,” Innes said.
At 6.15am Hong Kong’s Hang Seng was up 1.35% while Japan’s Nikkei had added 0.4%.
Gold was up 0.37% to $1,490.82/oz and platinum 0.58% to $937.59. Brent crude had risen 0.16% to $62.90 a barrel.
The rand was 0.14% firmer at R14.624/$ — its best level in a month.
Global focus remains on issues of monetary policy, with the European Central Bank (ECB) beginning a meeting on Wednesday. Expectations run high that a stimulus package will be announced on Thursday.
Locally, business confidence figures for August are due later.
Aspen Pharmacare is set to release its results after markets close on Wednesday, while Growthpoint is expected to release its full-year results to end-June.
Insurance software company Silverbridge is expected to report later that headline earnings per share (HEPS) fell as much as 240% in the year to end-June.
UK-focused Capital & Regional is expected to report its interim results to end-June later, having said the results would reflect that its strategy of focus on community-shopping centres was working.