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JSE up as Greece hopes improve sentiment

Johannesburg - The JSE rally continued on Tuesday morning on investor hopes that a settlement can still be reached on the Greek debt crisis, although there is no new evidence to support this.

The improved sentiment on the situation in Greece also helped the JSE indices recover sufficiently from their hopelessly oversold positions to build some support the market can achieve further upside momentum from.

The financial sector, which gained about 2% on Monday, continued upwards on Tuesday morning and at midday was another 1.34% higher. This week’s upward momentum is the first real improvement since the last week in April.

At midday the All-share index was another 0.69% higher at 52 549 points after gaining 0.71% on Monday, while the Top 40 index which was 0.91% stronger on Monday added another 0.74% on Tuesday to trade at 46 934 points - above the important resistance level of 46 820 points.

The technical analysts of Imara SP Reid said on Tuesday in their daily Market Snapshot there are signs that risk aversion is diminishing due to improved sentiment about Greece.

This is clear from the strong performance from some of the heavyweights on the JSE, normally in high demand from foreign investors. One of them, Naspers [JSE:NPN], gained another 1.25% to R1 920.49 on Tuesday morning. The share is unscathed by the correction of the last months, as it is 3.82% higher over the past seven days and 13.6% over the past 90 days.

The return for the past year is an impressive 53.6%.

SABMiller [JSE:SAB] also continued its improvements of Monday and traded another 0.15% higher at R650.49, while Sasol [JSE:SOL] traded 0.90% stronger at R432.00. The Industrial index was already 0.82% higher at midday.

Banking shares were particularly strong and FirstRand [JSE:FSR] and Standard Bank [JSE:SBK], the two most widely traded shares in the sector, again made strong gains. FirstRand was 1.97% stronger at R53.33 and Standard Bank gained 1.66% to trade at R159.61. Capitec [JSE:CPI], which made its debut in the Top 40 index on Monday, was 1.61% stronger at R485.72.

Old Mutual [JSE:OML] was the busiest share in the insurance sector in terms of value and traded 0.95% higher at R40.38. MMI Holdings [JSE:MMI], which celebrated its debut in the Top 40 index on Monday with gains of more than 3%, continued on the same path and gained another 2.91% to R30.02.

MTN’s [JSE:MTN] share price was at midday 0.84% higher at R229.10 after the company said that more than 60% of its striking workers have already returned to work. The share price was resilient over the past month during the strike and lost only 1.88% over the past 30 days. The stock gained 4.7% over the past seven days.

The healthcare sector continued to be in the news after Mediclinic [JSE:MDC] announced on Monday that it is buying 30% of the British hospital group Spire Healthcare for R8.6bn (about $700m). The company said it sees potential in the ageing British population’s growing demand for healthcare.

Mediclinic’s share price closed 3.16% stronger on Monday at R102.80, which was one of the biggest gains on the JSE’s Top 40 Index. On Tuesday the share price was another 1.39% higher at R104.23. The share reached an all-time high of R133.00 in April this year.

Remgro [JSE:REM], which owns 40% of Mediclinic and will finance the Spire transaction initially, traded 1.74% higher at R250.80.

Netcare [JSE:NTC], South Africa’s other hospital group which is already very successful in Britain, lost 0.08% to R37.44.

 
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