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Johannesburg - The JSE on Friday was in the black for the first time this week, as dual-listed shares traded somewhat higher on the back of a slightly softer rand and external factors which have nothing to do with the beleaguered South African economy.
It was mainly moderate gains by the dual-listed shares in the industrial sector, which was 0.30% stronger, which pushed the overall indices higher. By mid-morning the All-share index was 0.23% up at 52 080 points, while the Top 40 index gained 0.17% to 45 813 points. Before Friday’s gains the All-share index lost almost 3% over the previous seven days.
The dual-listed shares, which earn most of their income in foreign currencies abroad and earn more in rand if the local unit is weak, received some support from the softer rand which traded at R2.93 to the dollar, as the market waits for a credit rating decision by Moody’s later in the day.
Moody’s is the only rating agency which has not yet downgraded South Africa’s foreign credit rating to junk status.
Most of the dual-listed shares are also listed on the London Stock Exchange, where the FTSE index jumped more than 1% in early trade as the pound plunged more than 2.5% in response to the news that British Prime Minister Theresa May failed to win a clear majority in Thursday’s election.
The FTSE index is similar to the All-share index on the JSE, as the majority of listed companies earn most of their income abroad and benefit from a weak pound.
The biggest share on the JSE, Naspers [JSE:NPN], which represents more than 12% of the market’s value, also received a boost from a strong run in Hong Kong in the share price of Tencent, the Chinese internet giant which represents most of Naspers’s value and income.
The Tencent share price was at one stage more than 2.5% higher at HK$281.70 after some analysts said there is still more potential in the company’s share price, which is currently close to record levels. The share closed 1.46% higher at $277.40.
Some analysts think the group’s online gaming revenue will grow 28% in 2017, driven by a 65% growth in mobile gaming. Tencent’s advertising revenue is expected to benefit from WeChat being well positioned to capture advertising needs.
Naspers’s share price was more than 2.3% higher at R2 710 in early trade, but at mid-morning was 1.09% stronger at R2 677.90. The share price lost 2.45% over the previous seven days.
Steinhoff [JSE:SHF], the international retailer which is also listed in Frankfurt, traded 0.63% higher after losing more than 7.5% over the previous seven days. The group announced that operating profit rose by 13% to €903m and revenue by 48% to €10.1bn in the six months to end-March.
A major part of revenue growth is due to an extended acquisition spree that has seen the group acquire six companies in the last 18 months (and a similar number in the 18 months prior to that). In the last six months the acquisitions of US-based Mattress Firm, UK-based Poundland, Australian retailer Fantastic Furniture and SA’s Tekkie Town became effective and added 26% to revenue and 8.7% to earnings.
Among the other dual-listed shares that also trade
in London, Richemont [JSE:CFR] was 0.39% stronger at R105.58, but British
American Tobacco [JSE:BTI] lost 1.36% to R910.49.
The share prices of the three biggest commodity giants on the JSE, which are listed in London, moved very little. Glencore [JSE:GLN] was 0.29% higher at R49.27, but BHP [JSE:BIL] was virtually unchanged at R198.22. Anglo American [JSE:AGL] traded 0.26% softer at R176.85. The Resources index was 0.44% higher at mid-morning.
Sasol [JSE:SOL] gained 1.37% to R372.23, despite the lower oil price which dropped to $47.95.
