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What to watch on the JSE

Port Elizabeth - Everything is going well in the South African investment world.

The market reached another new high during the week to keep the bulls smiling and fell back quite a bit on Thursday and Friday to keep the bears happy.
 
The same conflicting views could be seen within different sectors on the JSE this week.

A bunch of shares in each sector increased by a few percent, while just about an equal number of shares decreased during the past week.

Bulls will view the decline in prices at the end of the week as a short-term pull-back before a renewed rally, which is likely to be correct.

Bears will see these declines as only the start of a much-needed correction to bring share prices in line with financial and economic reality – which is equally likely to be correct.

In this scenario both teams will come and play with renewed vigour this week.

It was already visible during the last week in quite large and sharp swings in the market.

The JSE Top-40 index rallied and declined by a few hundred points at a time a few times every day this week.

This was heaven for speculators and brokers’ commissions, but less enjoyable for asset managers and risk-averse investors.
 
The list of shares that ended the week higher makes for interesting reading.

Naspers [JSE:NPN] increased by 9% to R1 136 per share, adding more than R40bn to the group’s market value.

Cape Town-based investment trust Pallinghurst Resources [JSE:PGL] ran up by nearly 11% as investors believe the group can benefit from the strike at the larger platinum producers.

Retail companies are also still in demand and most shares in the sector remained strong.

Prices of Woolworths [JSE:WHL] increased nearly 5%, Massmart [JSE:MSM] by just less than 3% and Mr Price [JSE:MPC] by 3.4%.

In the gold sector, Harmony increased by 4.4% during the week and Sibanye Gold [JSE:SGL] saw its share price rise by 3.7%.

Among the losers were Anglogold Ashanti [JSE:ANG], which declined nearly 3% and Durban Deep [JSE:DRD], which fell a massive 13%.

The platinum sector is still full of uncertainty. Last week it seemed that striking mine workers were willing to go back to work and earn money – cheered on by the rest of SA – but the good intentions never materialised.

Lonmin [JSE:LON] fell more than 13% when production did not get going after expectations that things were ready to get started again.

African Bank [JSE:ABL] declined another 11% last week to 845c per share, just about in line with most analysts’ valuation of the company after management announce large provisions for bad debt.

Abil has to date lost around half its market value after the news that some 30% of its total outstanding loans will probably not be repaid by debtors.

The week ahead

Market participants can look forward to quite a bit of company news as reporting season starts for companies that have their financial year-end at the end of March.

Altron [JSE:ATN] and Richemont [JSE:RCH] set the scene with good results last week, with Pioneer Food [JSE:PFG], Netcare [JSE:NTC] and SABMiller [JSE:SAB] set to follow suit.

Abil will give full details of its fall from market favourite to outcast when it announces its results on Tuesday.

Barloworld [JSE:BAW] and PPC [JSE:PPC] will announce their interim results and Mediclinic [JSE:MDC] will announce its final results for the year to end March.

- 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 NMMU.
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