MARKET WRAP: JSE muted as investors await global risk events

The JSE was little changed on Monday, while global markets were mixed as investors await further direction regarding the US-China trade war and global monetary policy this week.

Chinese officials said on Monday that China wants to seal a trade deal that accommodates both parties as soon as possible, Reuters reported. Markets are closely monitoring developments in the 17-month long conflict with a deadline to impose a tariff hike on $156bn worth of Chinese imports approaching later in the week.

Earlier, Japan’s Nikkei 225 rose 0.33% while the Shanghai Composite and Hong Kong’s Hang Seng were little changed, after China’s exports fell 1.1% in November amid concern about the effect the US-China trade war has had on its economy.

“It doesn’t take a genius to see that the trade war has severely taken its toll on Chinese trade. Unfortunately, as we’ve seen for months now, both sides have pretty high pain thresholds, which makes a deal far from certain. In fact, I wouldn’t be surprised if tariffs kick in and talks collapse completely,” said Oanda senior market analyst Craig Erlam.

Global markets are also awaiting the last monetary policy meetings from the US Federal Reserve and the European Central Bank (ECB) this week. Markets are expecting both to keep interest rates unchanged.

Shortly after the JSE closed, the Dow was down 0.12% to 27,980.82 points. In Europe, the FTSE 100 was down 0.2%, France’s CAC 40 0.34% and Germany’s DAX 0.12%.

Locally, Statistics SA is expected to release manufacturing production for October on Tuesday. The median forecast is for a contraction of 2.6% from one of 2.4% in September, according to a Bloomberg poll.

At 5.31pm, the rand had firmed 0.36% to R14.5817/$, 0.2% to R16.1482/€ and 0.23% to R19.18/£. The euro firmed 0.16% to $1.1074. 

The R2030 government bond was stronger, with the yield falling 3.5 basis points to 9.17%. Bond yields move inversely to their prices.

Gold was up 0.16% to $1,462.355/oz and platinum 0.25% to $896.94. Brent crude was flat at $64.30 a barrel. 

Alexander Forbes gained 3.76% to R5.24. The company said on Monday its normalised headline earnings per share increased 43% to 27.2c in the six months to end-September. It said the latest financial results are a clear sign that its strategic initiatives are starting to “bear fruit”.

Naspers said on Monday that its subsidiary, Prosus, has increased its offer for online takeaway service Just Eats. Naspers’s internet asset division is offering 740p (R142.18) per share for each Just Eats share. Naspers  fell 0.14% to R2,052.28 while Prosus gained 0.43% to R969.75. 

Stadio Holdings slumped 6.39% to R2.05. The private education company said on Monday that it had acquired a property for R28.5m from Citac Africa. The company also announced that its CEO Chris van der Merwe will step down from his role in March 2020. 

Altron fell 2.37% to R23.05. The technology company said on Monday that it had acquired identity security company Ubusha Technologies in a deal worth R360m, effective from March 2020, if the deal receives approval from competition authorities.

mjoo@businesslive.co.za

TsoboL@businesslive.co.za