MARKET WRAP: JSE closes lower on subdued trade due to US Thanksgiving

The JSE closed lower on Friday in subdued trade as the US celebrated Thanksgiving weekend.

Global investor attention remains on the US-China trade war, with markets waiting for a Chinese response to the US stance on pro-democracy protests in Hong Kong.

Earlier this week, US President Donald Trump signed a bill into law that provides for an annual review of Hong Kong’s trading relationship in a sign of support for the protesters, an issue that may provoke intransigence from Beijing during trade talks.

While the Hong Kong bill is providing poor optics, signing the deal into law was expected, said AxiTrader chief Asian market strategist Stephen Innes in a note. It had, however, now left investors speculating on the “resolute counter-measures” China will take, and whether it will be enough to damage trade talks, he said.

The JSE all share fell 0.63% to 55,349 points and the top 40 0.76%. Platinum and gold miners fared best, adding 0.77% and 0.45%, respectively, while industrials lost 0.51%. Banks, which had a torrid week, lost 5.46%, but recovered marginally, up 0.47%.

Sugar producer Tongaat Hulett said on Friday that it was engaging with authorities and will be pursuing claims against 10 executives, after a PwC probe identified a number of undesirable accounting practices. 

In June, Tongaat asked for its shares to be suspended after it was found that its financial results for the year to March 2018 could not be relied on.

The demerger and listing of Investec’s asset management business in London and Johannesburg will take place on March 13 2020, SA’s largest asset manager said earlier. Its shares fell 1.8% to R84.21.

Telkom said on Friday that SA’s third-largest mobile operator Cell C has rejected its takeover bid. Telkom said it continues to believe the offer is “a compelling proposition that would have created significant value for all stakeholders including Telkom’s shareholders”.

Telkom shares jumped 3.9% to R46.89, with those of Blue Label Telecoms, the largest shareholder of Cell C, gaining 3.85% to R3.24.

Phumelela Gaming and Leisure was unchanged at R2.20, despite saying earlier it had the “worst year in its history” to end-July, battered by regulatory changes and a subdued SA economy. The company reported a headline loss of R98.2m, compared with headline earnings of R155.6m previously. This led to a headline loss per share of 98.20c, from headline earnings of 154.23c previously.

Harmony led gains in the gold sector, rising 1.24% to R45.02. Northam did best of the platinum stocks, gaining 1.88% to R107. It was followed by Royal Bafokeng’s 1.84% rise to R43.79, while Sibanye-Stillwater improved 1.09% to R28.88.

The rand was a little firmer in late trade, with US Thanksgiving also having an effect on currency markets. At 5.51pm it had gained 0.5% to R14.6286/$, 0.45% to R16.1163/€ and 0.45% to R18.8965/£. The euro was little changed at $1.1017.

The yield on the R2030 government bond was almost unchanged at 9.215%. Bond yields move inversely to their prices.

Gold was up 0.45% at $1,462.88/oz and platinum 0.98% to $901.15. Brent crude fell 3.26% to $61.24 a barrel. 

International markets were mixed and shortly after the JSE closed, the FTSE 100 was down 0.63%, while France’s CAC 40 and Germany’s DAX 30 were a little higher. Earlier, the Shanghai Composite fell 0.61%, Hong Kong’s Hang Seng 0.2.03%, and Japan’s Nikkei 225 0.45%.

gernetzkyk@businesslive.co.za
lindera@businesslive.co.za