Publications
Partners
Port Elizabeth - The JSE ended a rather boring week marginally higher, mainly due to a spurt in share prices on Friday after Chinese authorities announced that they will reduce interest rates to stimulate its economy.
The announcement that the world’s second largest economy is bound to get a bit of help boosted all share markets as higher growth in China will help the rest of the world to recover too.
It is noticeable that European and US markets have recovered sharply after the serious dip during the most of September and the first weeks of October. Since middle October, the Dow Jones Industrial Index increased by around 6% and the FTSE 100 jumped by more than 11% as several central bankers around the globe affirmed their commitment to expansionary policies.
Other than the Friday afternoon run in share prices and the resultant bear squeeze on the futures market, the JSE offered little excitement during the last week with only a few shares showing big gains or losses.
The gold sector was the only one to add sparkle to investors’ and speculators’ long boring days. Steady quarterly results, a bit of life in the gold price and a volatile rand – as well as recent declines in share prices – all helped to fuel a little rally. AngloGold Ashanti [JSE:ANG] increased by nearly 15% during the week with Gold Fields [JSE:GFI] doing even better with a run of 16%.
Harmony Gold [JSE:HAR] added 11% and Durban Deep [JSE:DRD] ended the week 3.5% higher.
The positive sentiment flowed over to the platinum sector as well, where Anglo American Platinum [JSE:AMS] lead the charge with an increase of more than 10%. Implats [JSE:IMP] increased by nearly 10% and Lonmin [JSE:LON] addend 5.7%.
However, the increase in individual mining shares did little for mining houses and the two large conglomerates – Anglo American [JSE:AGL] and BHP Billiton [JSE:BIL] ended the week barely changed from a week ago.
Banks were positively boring with not even the good results from Investec [JSE:INL] and [JSE:INP] infusing some action. Investec announced that headline earnings increase by more than 30% in the six months to September and management said that losses due to bad debt has decreased.
Shares in food companies continued to be in demand. Astral Foods [JSE:ARL] increased by some 7.5% after announcing that headline earnings per shares increased sharply in the 6 months to September, while Tongaat [JSE:TON] ended the week 8% higher. Tiger Brands [JSE:TBS] increased by nearly 5% as investors approved the increase of 11.5% in headline earnings per share during the year to September.
Nobody even looked at Telkom and did their best to ignore the two thirds decrease in earnings during the first six months of its financial year.
The week ahead
It look like the coming week will be just as uneventful. Stats SA will announce producer price inflation for October and the Reserve Bank will release credit extension figures.
The only interesting number will be the announcement of the GDP to be calculated according to a “new and improved formula”. It will probably show that SA’s economy is larger than previously thought as it is bound to count more economic activity in the unrecorded informal sector.
Year-on-year growth might be higher as well, as several economists have already shown that the informal sector seems to grow faster than what people generally think.
A few companies are due to announce results as well. Netcare [JSE:NTC] and recently listed Rhodes Foods [JSE:RHF] will announce annual results and Naspers [JSE:NPN] will release interim results.
*After chasing money on the JSE for 15 years, Adriaan Kruger is now living a relaxed lifestyle in Wilderness and lectures economics part-time at NMMU.
