MARKET WRAP: Firmer rand boosts banks and financials

The JSE closed lower on Thursday in mixed trade as global markets remained jittery over the US-China trade impasse.

The world’s two largest economies appear to be trading blows again despite talk last week that indicated they were working out their problems.

At the World Economic Forum (WEF) in Davos on Wednesday, Chinese vice-president Wang Qishan alluded to US President Donald Trump’s economic policies, warning that the international order was under assault from “unilateralism, protectionism and populism”.

“We reject the practices of the strong bullying the weak and self-claimed supremacy,” he said.

The fear of slowing global growth, particularly in China, has kept markets volatile as analysts warn that demand for a wide range of commodities and products could weaken this year.

The JSE all share ended Thursday 0.51% lower at 53,639.1 points, while the top 40 relinquished 0.51%. The gold index added 1.48%.

A firmer rand in late trade saw banks gain 1.4% and financials 0.46%. Soon after the JSE’s close the rand was 0.69% firmer at R13.71/$. The stronger currency also boosted the local bond market with the benchmark R186 government bond last bid at 8.76% from Wednesday’s 8.84%.

Naspers lost 0.66% to R3,030. It rose on Monday, but has given those gains back, and more, in the subsequent three trading days, leaving it down about 1% on the week. It is still trading well off its record high, achieved in November 2017, when it reached R4,142.99.

Diversified miners lost ground after the Anglo stable released production updates earlier in the day. Its suite of mines largely hit their full-year production targets for 2018 despite a difficult final quarter for some of its operations. The biggest falls came in platinum and palladium production, which were 12% and 7% lower, respectively, in the fourth quarter.

Anglo’s share price fell 0.72% to R322.27, while its subsidiary Kumba Iron Ore gained 1.68% to R288.94. Anglo American Platinum was little changed at R593.84.

Vodacom, which earlier reported a drop in its South African customers in the final quarter of 2018, saw its share price slump 5.97% to R121.87. The cellphone network attributed the fall in local customer numbers to its efforts to reduce the once-off use of SIM cards. So, while it saw a large drop in pre-paid customers, it gained 86,000 new contract customers over the period.

Nedbank led gains in the banking sector, rising 2.16% to R280.14, followed by Capitec’s 1.99% gain to R1,150. Standard Bank added 1.8% to R188 and FirstRand 1.13% to R69.52.

The Dow was flat just before 6pm local time, while the FTSE 100 was 0.21% weaker. After earlier losses, Germany’s DAX 30 was up 0.19% and France’s CAC 40 0.46%.

At the same time gold was flat at $1,282/oz, while platinum had gained 0.94% to $802.

- BusinessLIVE