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Port Elizabeth - The JSE drifted mostly lower during the past week after its extremely strong start in the first week of the year, and the All-share Index ended Friday nearly 1,500 points lower than the new record high set 10 days ago.
Brokers and commentators blame the weaker share prices on a strengthening currency, which recovered from its five-years lows of a few days ago.
These lower share prices were in line with international markets which also pulled back from recent high levels, after the announcement of worsening US employment figures which raised fears that the US economy is not recovering as fast as previously thought. Markets around the globe, from Tokyo to London to Wall Street, faltered.
Commodity and mining shares were decidedly lower on the JSE, with shares such as Kumba Iron Ore (JSE: KIO) falling more than 6% during the last week and Anglo American Platinum (JSE: AMS) dropping nearly 8%.
Banks reflected the same weaker trend: FirstRand (JSE: FSR) declined 4.6% during the week and African Bank (JSE: ABL) dropped by nearly 10% since 10 days ago. At 1 110c, Abil is now less than half its 12-month high of 2 477c.
A few industrial shares bucked the weaker trend and were still forging ahead, such as Imperial Holdings (JSE: IPL) and Famous Brands (JSE: FBR).
The week ahead
Share prices firmed a bit on Friday, but not enough to make much of a dent to recent losses and not enough to bring much hope for the new week.
Investors will be wise to remain cautious and wait for lower prices, while speculators might find more profits on the short side of the market as there is little good news to bring a worthwhile upswing.
Recent economic figures - such as lacklustre retail and car sales - were not encouraging at all, and there is continued concern about consumer debt levels. Statistics SA will announce retail sales data for November, while individual retail groups will start to give indications of their December trading season – all of which are expected to be rather dull.
SABMiller will publish a trading update for the three months to end-December, which will probably show slow beer sales in most developed countries and continued growth in Africa. Commodity shares will remain volatile as the currency struggles to find a level to appease both importers and exporters.
The only source of excitement remains the tussle over control of Adcock Ingram (JSE: AIP) and the restructuring of the previously listed Element One, holding company of the listed Caxton CTP (JSE: CAT).
- 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.
Brokers and commentators blame the weaker share prices on a strengthening currency, which recovered from its five-years lows of a few days ago.
These lower share prices were in line with international markets which also pulled back from recent high levels, after the announcement of worsening US employment figures which raised fears that the US economy is not recovering as fast as previously thought. Markets around the globe, from Tokyo to London to Wall Street, faltered.
Commodity and mining shares were decidedly lower on the JSE, with shares such as Kumba Iron Ore (JSE: KIO) falling more than 6% during the last week and Anglo American Platinum (JSE: AMS) dropping nearly 8%.
Banks reflected the same weaker trend: FirstRand (JSE: FSR) declined 4.6% during the week and African Bank (JSE: ABL) dropped by nearly 10% since 10 days ago. At 1 110c, Abil is now less than half its 12-month high of 2 477c.
A few industrial shares bucked the weaker trend and were still forging ahead, such as Imperial Holdings (JSE: IPL) and Famous Brands (JSE: FBR).
The week ahead
Share prices firmed a bit on Friday, but not enough to make much of a dent to recent losses and not enough to bring much hope for the new week.
Investors will be wise to remain cautious and wait for lower prices, while speculators might find more profits on the short side of the market as there is little good news to bring a worthwhile upswing.
Recent economic figures - such as lacklustre retail and car sales - were not encouraging at all, and there is continued concern about consumer debt levels. Statistics SA will announce retail sales data for November, while individual retail groups will start to give indications of their December trading season – all of which are expected to be rather dull.
SABMiller will publish a trading update for the three months to end-December, which will probably show slow beer sales in most developed countries and continued growth in Africa. Commodity shares will remain volatile as the currency struggles to find a level to appease both importers and exporters.
The only source of excitement remains the tussle over control of Adcock Ingram (JSE: AIP) and the restructuring of the previously listed Element One, holding company of the listed Caxton CTP (JSE: CAT).
- 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.
