MARKET WRAP: JSE records first week of gains in three

The JSE had its first weekly gain since the beginning of November on Friday as renewed hopes of a trade truce between the US and China helped global equities recover, after mixed messages from the two weighed on sentiment earlier this week.

Chinese President Xi Jinping said on Friday that China wants to complete the first phase of a trade deal with the US and to avoid a trade war, Reuters reported.

Shortly after the JSE closed, the Dow was up 0.32% to 27,856.30 points. In Europe, the FTSE 100 had added 1.4%, France’s CAC 40 0.45% and Germany’s DAX 30 0.39%. Earlier, the Shanghai Composite fell 0.63% while Hong Kong’s Hang Seng gained 0.48% and Japan’s Nikkei 225 0.32%.

Locally, credit ratings agency S&P Global is expected to release the result of its latest ratings review on SA on Friday night, with analysts speculating that the agency will likely change SA’s outlook to negative.

“S&P already rates SA at sub-investment grade ... and we expect the agency will deliver a negative outlook on SA’s local currency rating, and quite possibly on its BB-scored foreign currency rating too,” said Investec economist Annabel Bishop.

The rand was subdued for the week despite getting a slight boost after the Reserve Bank kept the repo rate unchanged at 6.5% on Thursday, a move that was largely priced in by the market. 

At 5.20pm, the rand had weakened 0.13% to R14.707/$ while it was flat at R16.2395/€ and 0.4% firmer at R18.8866/£. The euro was down 0.15% at $1.1041. 

The R2030 government bond was weaker with the yield rising eight basis points to 9.145%. Bond yields move inversely to their prices. 

Gold was flat at $1,465.60/oz while platinum lost 1.83% to $897.81. Brent crude added 0.33% to $63.87 a barrel.  

The JSE all share rose 0.39% to 56,759 points and the top 40 0.5%. Resources gained 1.48% and platinum miners 0.53%. The all share gained 1.26% for the week.

Industrial property company Stenprop said on Friday that it had declared an interim dividend of 3.375p in the six months to end-September. The company said it will accelerate the sale of its German assets to focus on UK-based, multi-let industrial assets. Its share price was little changed at R21.59.

Tiger Brands dropped 6.56% to R216.69. The consumer goods company said on Friday that headline earnings per share (HEPS) fell 17% to R13.49 in the year to end-September. The company said the results reflected a difficult consumer environment and input costs rising ahead of price inflation.

Naspers gained 1.18% to R2,233.15. The multinational internet group reported on Friday that its core HEPS rose to $3.80 in the six months to end-September from $3.53 in the comparable 2018 period. Naspers CFO Basil Sgourdos said the food delivery business remains the largest investment area for Naspers in 2019, “underscoring our confidence in the strong, underlying unit economics of this business”. Investment in food delivery also helped the group’s trading profit move up 6% to $1.9bn.

Alexander Forbes said on Friday on that it expects HEPS to increase by between 28% and 38%, or 17.2c and 18.5c, for the six months to end-September. The asset manager said some factors that influenced the increase in earnings included reduced costs and “an improvement in the results of our professional indemnity cell captive insurance facility”. Its share price rose 0.74% to R5.42.                     

mjoo@businesslive.co.za