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Johannesburg - Resources shares continued to pull the JSE higher on Monday, although the gains were quite modest in morning trade.
International markets are
now treading water as the euphoria about possible economic stimulus by the
new Trump government in the US begins to wear off.
The only exception is the FTSE index in London, which reached yet another high on Friday as the pound continues to weaken in the light of uncertainty about Brittain’s exit from the European Union. A strong market in London supports the dual-listed shares on the JSE.
By mid-morning the Resources index was again stronger, with a 1.07% increase. The index has already gained more
than 7% over the previous seven days. The volatile Gold index, which was flat
over the past seven days, was 2.752% higher in early trade on Monday.
At that stage the All-share index was 0.58% up at 53 101 points, while the Top 40 index traded 0.41% stronger at 46 255 points.
The industrial
index, which includes most of the dual-listed shares, was 0.48% stronger as heavyweights such as Naspers [JSE:NPN] and Richemont
[JSE:CFR] took a breather after strong moves last week. The Financial index was only 0.08% higher.
The star performer in the
resources sector was Anglo American [JSE:AGL], which was 1.57% higher on a new
52-week high of R222.84. The stock dropped gradually from R292.00 in July
2014 to only R53 in January 2016, but since then its recovery has been
nothing less than spectacular.
Before Monday’s trade the
share price was already 295% higher than a year ago, and the strong growth
continued. It gained more than 14% over the past seven days and is more than
40% higher over the past 90 days.
Anglo’s spectacular growth
is driven by a recovery in commodity prices, particularly the prices of copper
and iron ore, which are supported by expectations of a worldwide recovery in industrial
production.
Some of its subsidiaries
have also grown spectacularly, particularly Kumba Iron Ore [JSE:KIO] which traded 1.37% higher at R169.12. This share was also in the doldrums at the
beginning of last year, when it traded as low as R25.40, but has since grown 556.85% over the past year.
Anglo’s biggest subsidiary
on the JSE, Anglo American Platinum [JSE:AMS], also recovered strongly from a
52-week low at the beginning of 2016 and is now trading 70.95%
higher. The share gained 2.50% to R313.65.
Other commodity giants
such as BHP Billiton [JSE:BIL] and Glencore [JSE:GLN] performed more modestly on
Monday, with BHP Billiton gaining 0.92% to R240.99 and Glencore trading 0.48%
stronger at R52.36.
Naspers was only 0.13%
higher at R2 173.57 after gaining more than 7% last week, while Richemont was
0.19% softer at R103.46 after lifting more than 17% over the previous seven
days.
Retail shares continued to
be in the spotlight, and Woolworths [WHL] was once again the busiest share on
the JSE as investors digest the latest Christmas sales figures.
Woolworths' share price was under pressure earlier last week, but started
recovering on Friday and the stock traded 2.80% higher at R70.40.
Woolworths last
week announced it suffered a sharp slowdown in Christmas sales growth, excluding a R3.8m
windfall from the sale of David Jones’s Sydney head office. The retail chain
expects to report a decline in interim earnings. Overall group sales growth for
the 26 weeks to Christmas day was 6.7%, less than half the matching period’s
17.1%. The share price is still more than 22% lower for the past year.
The Foschini Group’s [JSE:TFG] share price jumped 5.95% to R169.12 after the group announced Christmas trading was above expectation, with sales growth of 14.6% for December (November 27 2016 to December 24 2016). Growth for TFG International was 47.9% in British pounds and growth for TFG Africa was 11.5%, with same store growth of 5.6%.
