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Johannesburg - Investors worldwide, including those on the JSE, were cautious on Tuesday morning as the result of Thursday’s referendum on Britain’s future membership of the European Union remains a close call.
Increased optimism that Britain would choose to stay in the EU spurred a major rally on Monday, but investors were more cautious on Tuesday as various surveys predict different outcomes to Thursday’s vote. Monday’s gains in a single session were bigger than in any full week since February.
Asian markets were cautiously higher, but European markets lost ground which also pulled the JSE lower, as most of the biggest shares on the JSE are listed in Johannesburg and London.
The rand however continued its surge on increased emerging market optimism about the outcome of the Brexit vote, and on Tuesday morning traded at R14.69 to the dollar, more than 1% stronger than the previous days.
READ: Fading Brexit fear fuels rand rise
That also put a damper on the prices of the big dual-listed shares on the JSE, regarded as rand hedges because they have business interests all over the world.
The biggest losers in London were mining shares due to a decline in metal prices on oversupply concerns, and the commodity index on the JSE followed suit. BHP Billiton [JSE:BIL] and Anglo American [JSE:AGL] both lost more than 2%.
By mid-morning the All-share index was 0.75% softer at 52 635 points and the Top 40 index had lost 0.81% to 46 633 points. The commodity index was 1.29% lower and the Gold index 0.75% down. The Industrial index was 0.75% lower and financial shares had lost 0.35%.
A Yougov poll for the Times newspaper published late on Monday showed a lead for the 'leave' campaign, while a survey by ORB for the Daily Telegraph indicated the 'remain' camp was ahead.
"All the signs of ORB’s latest and final poll point to a referendum that will truly come down to the wire," said Lynton Crosby, a political strategist who advised the ruling Conservative Party at the last national election in 2015.
Respected social research body NatCen published a poll conducted from May 16 to June 12 that found 'remain' at 53% and 'leave' at 47%.
Investors also remain wary ahead of Federal Reserve chief Janet Yellen's two-day testimony before Congress starting later on Tuesday, as she might offer clues on the timing of the next US interest rate increase.
A decline of more than 0.5% in the copper price on supply concerns led to the sell-off in London of resources shares. The dual-listed commodity producers also lost ground on the JSE and at mid-morning BHP Billiton was 2.29% softer at R181.29.
Anglo American traded 2.24% lower at R141.27 but in earlier trade the share price shed more than 3% to R139.16. Anglo American Platinum [JSE:AGL], the world’s biggest producer of the metal, lost 2.50% to R369.14. The company on Tuesday said its first-half profit would probably be at least 20% lower after a tax gain boosted earnings in the previous year and the dollar price of the metal declined.
Lonmin [JSE:LON], which is also listed in London, lost 6.31% to R39.75, but Impala Platinum [JSE:IMP] was only 0.57% lower at R38.41.
The Bidvest Group [JSE:BVT] said it will offer shares worth as much as R4.4bn ($287m) in recently spun-out foodservices unit BidCorp [JSE:BID] on the JSE, after some shareholders were unable to take up their allocation.
As many as 18.4 million BidCorp shares will be available for sale, with proceeds going to investors who were due to receive the stock. The shares will be sold at R230 to R240 each, compared with a closing price of R265.10 on Monday. BidCorp’s share price gained 0.62% to R266.10. Bidvest lost 1.30% to R133.44.
Most of the big dual-listed shares traded lower. Naspers [JSE:NPN] lost 1.92% to R2 167.95 and SABMiller [JSE:SAB] was 0.38% weaker at R927.92. British American Tobacco [JSE:BTI] gave up 0.86% to trade at R911.86 and Richemont [JSE:CFR] was 2.07% softer at R90.19.
Old Mutual [JSE:OML] was again the busiest share on the JSE and traded 0.30% higher at R40.09. Among the banks FirstRand [JSE:FSR] lost 1.23% to R44.19, Standard Bank [JSE:SBK] was 0.62% lower at R122.74 and Barclays Africa [JSE:BGA] shed 0.25% to R145.80.
