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Johannesburg - The strong dollar, which reached the highest level in seven weeks on Friday on expectations of an imminent rate hike in the US, had a positive effect on the JSE.
The rand, which has been firm of late, eventually succumbed to the rampant dollar and the softer local unit, as well as stronger European markets, supported the prices of the big dual-listed shares on the JSE on Friday.
Naspers [JSE:NPN], which represents about 20% of the JSE’s market value and has hardly moved over the past month, at mid-morning was more than 2% higher.
Investor attention worldwide is on the latest US jobs report to be released later on Friday. Expectations are that the report will be so strong that it will leave the Federal Reserve no other choice but to hike interest rates at its meeting next week.
Higher US interest rates is good news for the dollar but not for the rand, which traded almost 1% softer against the US unit at R13.27. Earlier this week the local currency was still below R13.00/dollar, but analysts said its inability to hold these levels is an indication that it might weaken even further.
A softer rand is good news for the dual-listed shares, as they become less expensive in rand for overseas investors.
The Industrial index, which includes most of these shares, at mid-morning was already 0.94% higher. The Resources index, which lost more than 2% on Thursday due to a strong dollar, gained 0.21% and the Financial index was 0.20% up.
As a result, the All-share index at mid-morning was 0.57% higher at 51 199 points, while the Top 40 index was 0.65% stronger at 49 288 points.
Naspers at mid-morning was 2.19% firmer at R2 154.14, making up all of the losses of the previous 30 days when the share lost 1.03% of its value. Naspers is however still more than 14% lower than six months ago.
Richemont [JSE:CFR] gained 0.44% to R98.88, Mondi [JSE:MNP] was 0.73% stronger at R301.70 and Steinhoff [JSE:SNH] traded 0.47% higher at R64.15.
Aspen [JSE:APN] was one of the most volatile shares on the JSE, trading in a range between R280.61 and R262.66. By mid-morning the share had lost 3.92% to R266.96. It was one of the best performers on Thursday after the group posted a 6% rise in half-year profit and a 13% revenue jump as it reported its first sales in China.
Aspen started trading in China in the six months to end-December and chief executive Stephen Saad he expected sales of about R2bn in China over the next 12 months.
Despite no shortage of results in the financial sector, share prices did not move much. Sanlam [JSE:SLM] reached an intraday 52-week high for the second day, but could not maintain the momentum. By mid-morning the share was unchanged at R69.51.
Old Mutual [JSE:OML] lost 0.3% to R36.27 after the company reported sluggish results, but said it is making good progress with its plan to split the group into four different companies. The operating profit of £1.67bn was up 1% from a year earlier, helped by a focus on costs. The insurance group reported that its after-tax profit was down 8.6%, and operating profit remained flat at £1.8bn.
MMI Holdings [JSE:MMI] lost only 0.20% to R24.65 after the group reported an increase in disability claims. The insurance group also reported a 5% decline in diluted core headline earnings and headline earnings per share to R1.6bn and 99.6 cents per share respectively.
Banking group FirstRand [JSE:FSR] reported a 7% rise in normalised headline earnings to R11.64bn in the six months to end-December, compared to the first half of the year. The return on equity came in at 22.9% and the group lifted its interim dividend by 10% to R1.19/share.
The share price gained a modest 0.57% to R51.04. Standard Bank [JSE:SBK] was 0.49% higher at R154.51 and Barclays Africa [JSE:BGA] lost 0.10% to R150.50.
