MARKET WRAP: JSE gains on trade-war optimism
Business confidence edged up to 26 points in the fourth quarter, from a 20-year low of 21 in the previous one
The JSE was higher on Wednesday, as more comments regarding the US-China trade war continued to lift global market sentiment. US President Donald Trump said on Tuesday that the US is in the “final throes” of working out a trade deal to end the 16-month-long spat.
“Enduring optimism that the US can reach an interim trade deal with China has helped investors overlook disappointing Chinese economic data,” said London Capital Group head of research Jasper Lawler. “Investors can stomach a slowdown in China if they see an endpoint via the phase-one trade deal. If the deal doesn’t materialise and the data out of China continues to weaken, then things could go south quickly.”
Shortly after the JSE closed, the Dow was flat at 28,090.45 points. In Europe, the FTSE 100 had added 0.53% and Germany’s DAX 30 0.33%, while France’s CAC 40 was little changed. Earlier, the Shanghai Composite fell 0.13% while Hong Kong’s Hang Seng rose 0.15% and Japan’s Nikkei 225 0.28%.
At 5.18pm, the rand had firmed 0.36% to R14.7463/$, 0.57% to R16.2212/€ and 0.35% to R18.975/£. The euro had weakened 0.19% to $1.1001.
The R2030 government bond was stronger with yield falling six basis points to 9.175%. Bond yields move inversely to their prices.
Gold was down 0.45% to $1,454.71/oz and platinum 1.81% to $895.83. Brent crude lost 1.54% to $63.14 a barrel.
Business confidence edged up to 26 points in the fourth quarter, from a 20 year-low of 21 in the previous one, according to data compiled by RMB and the Bureau for Economic Research at Stellenbosch University.
“It can be noted that the index has remained anchored below the 50-point neutral level since the first quarter of 2015, indicating the protracted nature of the slump in confidence among SA businesses and the scope of what is required to restore it to levels that will see firms begin to invest once again,” Mercato Financial Services analyst Nico Du Plessis said.
The JSE all share gained 0.21% to 56,173.9 points and the top 40 0.19%. Financials rose 0.86% while general retailers dropped 2.11%.
Mr Price fell 1.53% to R175.14, TFG 1.26% to R157 and Truworths 1.15% to R50.76.
Woolworths said on Wednesday that group sales increased 2.2% in the 20 weeks to November 17 while food sales rose 8.8%. The retailer’s share price dropped 4.85% to R54.
Among financials, Sanlam rose 1.33% to R78.32, Santam 1.4% to R290, Old Mutual 0.64% to R18.83, and Alexander Forbes 0.93% to R5.43.
Santam said on Wednesday that it experienced a “subdued” claims environment up to the end of October 2019. The insurer said its commercial and personal intermediate business experienced “strained gross written premium growth in the current difficult economic climate” in the 10 months to end-October.
Nampak said on Wednesday that its trading profit fell 21% to R1.6bn in the year to end-September. The company’s CEO André de Ruyter said the majority of its regions experienced “constrained consumer demand and concomitant pressure on volumes”. Its share price slumped 15.95% to R5.27.
Investment company Brait said on Wednesday that it plans to launch an equity capital raise of up to R5.6bn as the company looks to address debt issues. Its share price fell 11.82% to R14.55.
Anglo American said on Wednesday that it plans to sell a 12% stake in its Australian coal mine Grosvenor for $141m to its Japanese partners. The diversified miner’s share price was flat at R392.39