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JSE investor focus turns to results

Port Elizabeth -  Shares started the week on a weaker note since hitting new record highs the previous week and by Wednesday most major indices were down by a couple of hundred points.

Strong international markets helped the JSE to edge higher on Thursday and Friday, but the market ended the week much lower than the previous week.

Only a hand full of the larger shares ended higher than a week ago, amongst them Sappi [JSE:SAP], ArcMittal [JSE:ACL], AngloGold [JSE:ANG], Sasol [JSE:SOL], Tiger Brands [JSE:TBS], Clicks [JSE:CLS], JD Group [JSE:JDG], Mr Price [JSE:MPC] and Naspers [JSE:NPN].

Mr Price posted a 22% increase in earnings for the half year last week and commented that prospects for the second half is looking promising.

Other retail shares came under pressure when StatsSA's retail sales figures showed that sales were largely unchanged in September compared with a year ago. Massmart [JSE:MSM] showed weakness after investors were disappointed in recent sales figures. The share is now some 25% lower than its recent high.

Lonmin [JSE:LON] closed higher due to unexpected good results, while Adcock Ingram [JSE:AIP] increased sharply after news that CFR Pharmaceuticals, the largest pharmaceutical company in Chile, has officially made an offer to buy the group.

Adcock's BEE shareholders, who came on board less than 5 years ago, are set to make a lovely return. The share price has increased to 7100c compared with 3600c when the deal was struck.

The week ahead

The market would probably remain subdued in the coming week, weighing stronger international markets against mostly negative sentiment with regards to the local economic outlook.

Reserve Bank governor Gill Marcus is expected to give more bad news than good on Thursday when she announces the outcome of the bank's monetary policy committee meeting. The MPC will probably not change the repurchase rate despite inflation exceeding the 6% target, but her comments will be aimed at reigning in credit extension by banks.

Activity in the market would be focused on companies that will be announcing results. Annual results are due from PPC [JSE:PPC], Barloworld [JSE: BAW], Netcare [JSE:NTC], JD Group [JSE:JDG], Tiger Brands [JSE:TBS] and Reunert [JSE:RLO]. Interim results are due from Telkom [JSE:TKG], Investec [JSE:INL],[JSE:INP] and SABMiller [JSE:SAB].

Commodity shares might come under further pressure due to the recovery in the rand and little good news from abroad to raise expectations of  significant increases in demand for metals and minerals.

- Fin24

* 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 Nelson Mandela Metropolitan University. Views expressed are his own.


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