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Johannesburg - The volatility in world markets, spurred on by dramatic daily swings in the oil price, has driven JSE investors to the sidelines.
On Thursday the major indices on the local exchange were again just moderately higher than the previous day, despite big gains in Asia and on Wall Street after the oil price made one of its spectacular recoveries.
But the market does not seem to be in a bearish mood. Although the daily gains of late are small, the All-share index was already 3.32% higher over the past seven days and 9.6% over the past 90 days before Thursday’s trade. The Top 40 index was also 3.3% up over the past week and 7% stronger over the past three months.
By mid-morning the All-share index was only 0.14% higher at 53 864 points and the Top 40 index gained only 0.13% at 47 331 points.
The slow and steady progress on the JSE is in sharp contrast with some world markets. Asian shares reached a five-and-a-half month high on Thursday as oil prices rallied more than 4% overnight, and on Wednesday evening Wall Street shares ended less than 2% short of a record high.
Oil prices surged on Wednesday and for the first time since November last year Brent crude was trading above $46 per barrel. This followed as a smaller-than-expected build in US crude inventories offset oversupply worries stirred by Kuwaiti oil workers ending a strike.
Oil bulls also bet that major crude producers would meet again to try to curtail output, even as Moscow denied media reports that Russia planned to host such a meeting. Last Sunday, Russia and Opec nations had failed to reach an agreement on freezing production at a meeting in Doha.
Many other commodity prices were also firmer, with copper rising to its highest level in a month. The Thomson Reuters Core Commodity Index rose to its highest level since early December.
The Resources index on the JSE, which gained more than 10% over the past seven days before Thursday’s trade, was however only 0.66% higher by mid-morning as investors used the opportunity to take some of the profits generated over the past few days.
One of the shares in question was Anglo American [JSE:AGL], which traded 1.53% lower at R161 after gaining more than 24% over the previous seven days. Glencore [JSE:GLN], which is 12.8% higher than a week ago, gained a modest 049% to R35.06 on Thursday morning.
BHP Billiton’s [JSE:BIL] strong run, which delivered a return of 20.8% over the past seven days, continued on Thursday and the share was stronger at R209.19.
Iron ore producers were again the flavour of the day, with Kumba [JSE:KIO] trading another 9.98% higher at R122.00. Before Thursday’s trade the stock was was 191% higher than 90 days ago. Assore [JSE:ASR], which gained 232% over the past 90 days, added 3.21% to trade at yet another 52-week high of R210.25.
Sasol [JSE:SOL] did not respond much to the volatility in the oil price and traded only 0.50% stronger at R460.47. The stock is 3.9% higher over the past seven days, but 5.7% softer over the past 30 days.
The share prices of the big multinationals in the industrial sector hardly moved as they are hampered by the strong rand, which traded at R14.27 to the dollar on Thursday morning. Naspers [JSE:NPN] was only 0.06% higher at R2 024.01 and SABMiller [JSE:SAB] lost 0.10% to R871.00.
