Johannesburg - Naspers made a strong run on the JSE on Monday, pulling the Industrial and All-share indices higher, but the firm rand once again put a cap on the rest of the market. The currency traded at R12.69 to the dollar on Monday morning, the highest level since July 2015.
At mid-morning the Industrial index was almost 1% higher, thanks to Naspers which gained more than 2%, but the other big dual-listed shares in the index performed far more modestly due to the strong rand.
A firm local unit makes the dual-listed shares, which represent about 50% of the market’s value, more expensive for foreign investors and also has a negative influence on the rand income of the international conglomerates which earn a major portion of their income in other currencies abroad.
The firm rand is the result of the weaker dollar, which reached its lowest level in six weeks on Monday, and positive emerging market sentiment now that it seems US interest rates will not increase as quickly as analysts have feared. There was a danger that much higher interest rates in the US would draw capital from emerging markets back to the US, where the risks are perceived to be less.
But the strong rand could not put a damper on Naspers [JSE:NPN], which gained 2.61% by 12:50 to R2 275.67.
Naspers owns 34% of Tencent, the Chinese internet giant listed on the Hong Kong Stock Exchange, which gained 2.79% on Monday to reach a new 52-week high of $HK228.20. This was the result of strong support for emerging markets, with the Hang Seng Index on the Hong Kong market lifting 0.79%.
Naspers is now more than 5% higher over the past seven days, after the Federal Reserve's indication that a tightening of monetary policy in the US will be gradual, giving emerging markets a boost. Naspers is 10% higher for the year to date, but still far below its all-time high of R2 530 reached last year.
The result was that the Industrial index was already 0.89% higher at mid-morning, which helped the All-share index gain 0.44% to 52 786 points. The Top 40 index was 0.48% up at 45 525 points.
The Financial index was 0.26% higher, but the Resources index lost 0.18%. The Gold index was 0.12% stronger in response to the higher gold price, which gained 0.5% on the back of the weaker dollar.
Some of the other big shares with foreign interests dropped back on Monday with Sasol [JSE:SOL] losing 1.17% to R364.20, MTN [JSE:MTN] trading 0.29% softer at R127.93 and British American Tobacco [JSE:BTI] shedding 0.09% to R813.45.
Steinhoff [JSE:SNH] traded 0.51% lower at R64.95 and the share is now at the lowest level since December last year.
In the resources sector the big conglomerates were all trading lower. BHP Billiton [JSE:BIL] shed 0.44% to R208.57 and Anglo American [JSE:AGL] gave up 0.45% to R202.02. Glencore [JSE:GLN] lost 1.03 to R53.91. FirstRand [JSE:FSR] gained 0.51% to R53.28, but Barclays Africa [JSE:BGA] was 0.10% down at R156.06. The dual-listed Old Mutual [JSE:OML] gained 0.66% to R35.22.
* Fin24's parent company Media24 is part of the Naspers Group.