MARKET WRAP: JSE snaps four-week winning streak

20 September 2019 - 19:20 By Andrew Linder

The JSE edged a little higher on Friday, but fell 1.18% for the week, with Naspers and Prosus leading the losses, despite both paring these on the day.

Global equities have been buffeted this week by volatility in the oil price, after an attack on Saudi Arabian oil facilities at the weekend raised the spectre of escalating conflict with Iran.

The US Federal Reserve also delivered a mildly hawkish message at its policy meeting on Wednesday, while locally, the Reserve Bank kept interest rates on hold at 6.5% on Thursday — but, according to analysts, adopted a mildly dovish tone.

The Bank retained its growth forecasts at 0.6% for 2019, but revised down its 2020 outlook to 1.5%, from 1.8%, and 2021 to 1.8% from 2% previously.

Miners fared best on Friday, with the platinum index adding 3.88%, gold miners 3.41% and resources 1.06%.

Gold, which is seen as a safe haven, was boosted by concerns over rising tension in the Middle East, and was last seen up 0.37% to $1,504.01. It gained about 1% during the week. Platinum added 0.9% to $945.73, but was flat for the week. It has, however, been creeping up gradually since the start of 2019, and is now up nearly 20% for the year, its biggest gain since 2010.

Naspers rose 2.85% to R2,450 on Friday but fell 1.88% for the week. Prosus, its new internet subsidiary that listed in Amsterdam last week, recovered 1.67% to R1,131.91 on Friday, but was down 4.67% for the week.

Banks and financial stocks were under strain, with Investec plunging 6.81% to R83.77, its biggest fall since December, after warning earlier that interim headline earnings per share to end-September could fall by almost a fifth as it struggles with Brexit uncertainty and weak economic conditions in SA.

The all share gained 0.5% to 56,406.9 points and the top 40 0.53%. Banks led the losses, down 2.04%, with financials falling 1.7%.

Absa relinquished 2.58% to R163, Nedbank 2.18% to R236.91, Standard 2.14% to R180.74, and FirstRand 1.67% to R64.70.

Sanlam and Discovery were down 2.92% to R76.22 and 2.57% to R118.86, respectively.

Old Mutual was flat on the day and for the week, at R20.05. It gained 9.2% last week after suffering big losses since firing its CEO Peter Moyo in May.

Precious-stone producer Gemfields added 2.48% to R1.65, saying earlier that its net profit fell 22% to $12.4m in the six months to end-June, largely due to lower quality of production at its Montepuez ruby mine in Mozambique.

Grand Parade Investments was flat at R2.85, this despite it saying earlier that operating profit for the year to-end June almost doubled, partly due to an improved performance at its Burger King restaurants.

International markets were mixed with the Dow up 0.15% to 27,136.3 points, while the FTSE 100 was 0.1% lower. The CAC 40 added 0.51% and the DAX 30 0.15%.

Focus in the week ahead will be on SA’s non-farm payrolls on Thursday, which are expected to show weak labour-market dynamics in SA, Investec economist Kamilla Kaplan said: “Subdued economic activity and depressed business confidence should continue to restrict private sector employment growth. Indeed, recent survey evidence drawn from the retail and manufacturing sector surveys for the third quarter of 2019, signals expected declines in the number of individuals employed.”

At 6pm,the rand was 0.78% weaker at R14.9362/$. It fell 2.46% for the week, its biggest loss in six weeks.

With Karl Gernetzky

- BusinessLIVE