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Johannesburg - The JSE was in limbo on Friday morning and most of the indices hardly moved, despite a more positive tone in international markets.
The JSE staged a mini-rally on Wednesday before the public holiday on Thursday, and investors not on holiday for the long weekend seemed happy not to take any firm positions on Friday.
Most international markets were modestly higher on Friday as the killing of a pro-European Union politician in the UK was seen swaying sentiment towards the camp that will vote for the country to stay in the EU in next week’s referendum. Campaigning was temporarily halted after member of parliament Jo Cox was shot and fatally wounded on Thursday.
The latest polls still indicate that most Britons favour leaving the EU, but Betfair’s betting odds on the outcome of the referendum are favouring a “stay in” vote. Hedge funds are also beginning to discount the possibility of Britain staying in the EU.
Asian and European markets were moderately higher on Friday, but the markets will close lower for the week after some volatile trading. European markets are still 11% down for the year to date. The S&P 500 index on Wall Street also ended a five-day losing streak on Thursday, but trade was very volatile during the day.
By mid-morning the All-share index on the JSE was 0.08% higher at 52 067 points, and the Top 40 index was 0.01% softer at 46 043 points. The All-share dropped 0.5% shortly after the opening, but soon recovered and moved sideways for the rest of the morning.
The Financial index was at that stage 0.21% higher and the Industrial index gained 0.7%, with the Resources index 0.18% lower. The star performer was the Gold index, which gained 1.44% after the gold price traded overnight at $1 315 per fine ounce - the highest level since 2014. By mid-morning the yellow metal cost $1 284/oz.
Gold has been gaining for the past three weeks as it is regarded as a safe haven in times of uncertainty. Gold Fields [JSE:GFI] gained 3.01% on Friday morning to R64.07, while AngloGold Ashanti [JSE:ANG] was 1.67% higherat R247.77. Harmony [JSE:HAR] was however 0.92% softer at R52.74.
Three major central banks, the Federal Reserve of the United States, the Bank of England and the Bank of Japan, all voted this week to keep interest rates at current levels, citing the uncertainty about the possible effect of a "leave" vote in next week’s referendum on the global economy, as the most important reason for their decision.
Crude oil prices also rose for the first time in seven days as Brexit concerns ebbed, after losses of almost 4% overnight. Brent crude climbed 1.4% to $47.85 after it recorded losses of about 10% over the previous six trading sessions. Sasol’s [JSE:SOL] share price however did not respond and traded 2.29% lower at R400.55.
BHP Billiton [JSE:BIL], which also has interests in oil production, gained 0.70% to R179.68. Its big rival, Anglo American [JSE:AGL], traded 0.69% higher at R138.04.
MTN [JSE:MTN] was the best performer among the big shares and traded 4.60% higher at R143.99. The company said in a presentation it will more than double capital spending in Nigeria in the 2016 fiscal year. Africa’s biggest mobile operator will spend R11.1bn to upgrade its network in Nigeria, substantially higher than its spending of nearly R5bn last year.
Before Friday's trade MTN’s share price was almost 7% higher since news that it has agreed to pay a heavily reduced fine of $1.7bn, or a third of the initial penalty, in a settlement with Nigeria for missing a deadline to deactivate more than 5 million unregistered SIM cards.
Naspers [JSE:NPN] lost 1.94% to R1 242.98. The share slipped 5.3% over the previous seven days. SABMiller [JSE:SAB] was however 0.70% stronger at R928.98.
Steinhoff [JSE:SHF] lost 0.49% to R85.64. The international retailer said it has acquired more than 61 million shares in the British retailer Poundlands, which represents 22.78% of the issued shares. There is at this stage no certainty that an offer for the rest of the shares will be made, but any possible offer will be made in cash.
