MARKET WRAP: JSE lifted with gold miners leading the gains
Retail sales growth slowed to 1.1% in August, while the Bloomberg median forecast was for an increase of 1.7%
The JSE closed higher on Wednesday, with gold miners leading gains, while the rand pared some losses after weakening through the R15/$ level for the first time this week.
The local currency weakened to as much as R15.05/$ in intra-day trade after Eskom said it would implement stage two load-shedding, which has worsened investors’ fears about the state of the power utility.
“The concern is not directly related to the load-shedding but rather what the uncertainty means for Eskom. It was not forecast that they would be any supply constraints and, coupled with the precarious financial position, it creates uncertainty,” said Mercato Financial Services analyst Nico Du Plessis. “Eskom forms a vital part of any economic growth in SA and concerns will directly affect the medium-term budget policy statement (MTBPS) and the perception of the credit rating agencies.”
At 5.30pm, the rand had weakened 0.3% to R14.9304/$, 0.56% to R16.5153/€, and 0.67% to R19.1627/£. The euro was up 0.27% to $1.1062.
Gold rose 0.42% to $1,487.22/oz and platinum 0.42% to $884.94. Brent crude added 0.73% to $59.27 a barrel.
Retail sales growth slowed to 1.1% in August from 2% in July, data from Statistics SA showed on Wednesday. The median forecast was for a rise of 1.7%, according to Bloomberg.
Global markets were mixed on Wednesday as investors await further direction regarding the Brexit deal and the US-China trade war, amid fears that these geopolitical issues will continue to weigh on global growth.
Head of G10 strategy at Standard Bank Steven Barrow told Business Day TV on Wednesday that he is not pricing in the likelihood of a global recession in 2019 after the International Monetary Fund (IMF) cut its global growth forecast to a decade low.
Barrow said the US may be a little “immune” to some of the risks to growth and it is likely to avoid a recession, while countries that are most affected by trade, such as the UK and Germany, are close to experiencing a recession.
Markets have partially priced in a third interest-rate cut this year from the US Federal Reserve amid fears of a slowing US economy.
Earlier, the Shanghai Composite fell 0.41% while Hong Kong’s Hang Seng rose 0.61% and Japan’s Nikkei 225 1.2%.
At 5.30pm, the Dow was flat at 27,024.51. In Europe, the FTSE 100 was down 0.44% while Germany’s DAX 30 was up 0.42% and France’s CAC 40 was flat.
The JSE all share rose 0.93% to 56,090.5 points and the top 40 0.94%. Industrials gained 1.16% and gold miners 2.18%.
EOH jumped 18.34% to R16 after the company said on Tuesday that it will offload more assets to reduce its high debt burden. The company’s share price reached a two-month high of R17.70 in intra-day trade.
Royal Bafokeng Platinum fell 0.24% to R42.40, saying on Wednesday that it had struck a R2.1bn deal to deliver gold to mining financier Triple Flag.
Mediclinic gained 3.83% to R70.50 after the private hospital group said on Wednesday that its interim revenue for Mediclinic Southern Africa had increased 7% in the six months to end-September.
Tiso Blackstar climbed 4.86% to R3.67. The company said on Wednesday that it expected its headline loss per share to widen to between 46.96c and 50.49c, from 29.43c in the previous period.