MARKET WRAP: JSE closes higher with Naspers leading gains

The JSE closed higher on Monday in mildly risk-on trade. 

After the close of the JSE, the Dow was flat at 27,335.21  points, having ended last week at a record high following US Federal Reserve chair Jerome Powell's dovish tone during his testimony before US lawmakers.

In Europe, the FTSE 100 had gained 0.51%, France’s CAC 40 0.17%  and Germany’s DAX 30 0.54%. Earlier, the Shanghai Composite gained 0.4%, after China's second quarter GDP rose 6.2% year on year from 6.4% in the same period last year, in line with market expectations. Hong Kong’s Hang Seng added 0.29%, while Japan's Nikkei 225 was closed for a public holiday. 

The US-China trade war continues to weigh on global markets after the latter said on Monday that it would cut ties with US businesses selling weapons to Taiwan, Reuters reported.

The rand recorded its fourth consecutive day of gains on Monday, after reaching a five-month high against the dollar last week. Shortly after the JSE closed, it had strengthened 0.54% to R13.9036/$. It had also gained 1% to R17.4029/£, after having reached its best level since February during intra-day trade. It was 0.63% firmer at R15.6547/€. The euro was down 0.1% at $1,1258.

The benchmark government 10-year bond was stronger, with its yield falling six basis points to 8.02%. Bonds yields move inversely to bond prices.

Gold had fallen 0.32% to $1,410.81/oz while platinum had gained 1.96% to $844.87. Brent crude was down 0.3% to $66.66 a barrel. Investec economist Annabel Bishop said in a note on Monday that the price of Brent crude could average between $65 and $70 for 2019.

Investors will be closely watching the Reserve Bank’s interest-rate decision on Thursday with a 25 basis-point-cut being the consensus, according to a Bloomberg poll. Bank of America (BofA) Merrill Lynch analysts said in a note on Monday that the Bank could cut rates by up to 75 basis points by the end of its January 2020 meeting, should the Fed ease US monetary policy. 

The JSE all share rose 0.45% to 57,537.20 points and the top 40 0.5%. Platinum miners gained 1.26% and industrials 0.73, thanks, in the main, to Naspers. The latter gained 2.43% to R3,488.61 after its Hong Kong-listed subsidiary Tencent earlier gained 1.63% 

Royal Bafokeng added 3.58% to R36.99, Impala Platinum 2.12% to R73.83, Northam 0.96% to R64 and Anglo American Platinum 0.32% to R796.07. 

Rebosis slumped 7.35% to 63c after the property owner said it had cut all remaining ties with UK mall owner New Frontier Properties.

Bidvest fell 0.51% to R192.58 after it said it had agreed to buy Eqstra Fleet Management and Logistics from enX for R3.1bn.

Pioneer Foods improved 1.58% to R71.45. Without giving details, the company said on Monday it had entered into negotiations that could have a “material effect” on its share price.

Phumelela plummeted another 23.26% to R3.53, after the horseracing operator said on Friday that it had breached loan covenants on R300m of debt, following the loss of revenue it previously received from the Gauteng province through betting taxes.

AB InBev fell 0.94% to R1,227.64 after the company, which has its secondary listing on the JSE, cancelled its plans to list its Asia Pacific subsidiary, Budweiser Brewing Company APAC in Hong Kong.

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