Johannesburg - Concern about the global economy, and particularly the Chinese economy, was again the main theme on world markets and the JSE.
Although the weaker rand gave gold shares yet another boost, all the other major indices on the JSE were lower by midday. However, the losses were smaller than the previous day, when financial shares were under severe pressure.
Banking shares worldwide were under pressure as investors fret about the influence a weakening global economy will have on banks credit risks.
Asian markets were again under pressure on Tuesday, after Wall Street was sharply down the night before, but the European markets steadied after Monday’s rout.
By midday the All Share-index on the JSE was 0.82% lower on 49 024 points, while the Top 40-index traded 0.84% softer on 43 627 points.
The Financial index, which lost almost 2% on Monday, was only 0.66% down, but the Industrial index, with all the big shares in its ranks, lost 0.93%. The Resources index was also 0.59% softer but the Gold index gained another 1.24%.
The Industrial index was pulled down by Naspers [JSE:NPN] which lost another 3.9% to R1 777.92. Investors are concerned about Naspers’s exposure to the Chinese economy through its 34.4% stake in the Chinese internet giant Tencent. It was announced over the weekend that China’s foreign reserves fell for the third consecutive month.
British American Tobacco [JSE:BTI] was however 1.14% higher on R875.43 and SABMiller [JSE:SAB] edged only 0.16% higher to R962.84.
A lot of attention was on Bidvest [JSE:BVT] on the news that the industrial conglomerate plans to spin off its food service business from the group into a separate listing on the JSE’s main board, a move that has been mooted since 2012.
The division is the most profitable business unit in Bidvest, accounting for more than half of the group’s turnover of R116.6bn and trading profit of R4bn (for the year to June 30 2015).
The share price was however 1.60% lower on R356.97 after the group traded last week at a new high of R368.44.
Among the banks, FirstRand [JSE:FSR] was only 0.07% higher on R44.53, while Nedbank [JSE:NED], which lost more than 2% on Monday, traded only 0.18% softer on R185.67. Old Mutual [JSE:OML] was 0.95% lower on R36.53.