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Johannesburg - Share prices on the JSE were modestly lower on Wednesday morning in line with global markets as investors everywhere awaited clarity on the Federal Reserve's future path for US policy after a likely rate rise later in the day.
Markets globally were mostly moderately higher, as investors used the huge recent sell-off in tech stocks as an opportunity to acquire stock at lower prizes. Analysts said there is still an appetite for those stocks as their results still warrant further investment.
The biggest technology stock on the JSE, Naspers [JSE:NPN] was also moderately higher for the second consecutive day. By mid-morning Naspers was 0.83% higher at R2 563.84 after it traded more than 2% higher at R2 594.41 in earlier trade.
Naspers, which traded at an all-time high of R2 804.50 as recently as May 30 is still almost 4% lower over the past week. The company owns 34% of the Chinese internet giant Tencent, which represents the biggest part of Naspers’ market value and income. Tencent was at that stage 1.84% stronger at HK$270.40 on the Hong Kong Stock Exchange.
Naspers’ weight in the indices, particularly the industrial index, pulled the local market higher.
The All-share index traded mid-morning 0.38% higher at 51 821 points, while the Top 40 index, which includes most of the dual-listed shares on the JSE, gained 0.25% to 40 188 points. The industrial index was at that stage 0.24% higher.
The overall market was subdued as investors are waiting for the Fed’s announcement later today. Investors fully expect a rate rise largely because Fed officials have told them so, so attention will rather be on the outlook for policy and particularly when the central bank might begin to wind down its massive portfolio of US debt.
That uncertainty kept the dollar in check and that supported the rand, which strengthened even further to trade at R12.76 to the dollar by mid-morning. As strong rand also put a damper on local share prices as most of the dual-listed shares earn most of their income abroad in foreign currency and receive less in rand if the currency is strong.
The financial index was still 0.38% higher despite the news that Moody’s downgraded the credit rating of South Africa’s top banks. The news was expected as no institution in South Africa is allowed to have a higher credit rating than the sovereign rating which was downgraded last week.
The resources index gained 0.43% and the gold index 1.62% despite the strong rand.
Among the top banks Standard Bank [JSE: SBK] traded 0.41% stronger at R143.89 and Barclays Africa [JSE: BGA] was 0.62% higher at R148.60. FirstRand [JSE: FSR], which was one of the busiest shares on Wednesday, was however 0.75% softer at R47.34.
Among the insurers Old Mutual [JSE: OML] gained a solid 1.23% to R32.70 and Sanlam [JSE: SLM] was 0.29% stronger at R66.77.
The investment company Brait [JSE:BAT] was also one of the busiest shares and recovered strongly after it dropped on Tuesday to a 52-week low of R62.51 after the group reported a hefty 43% fall in full-year net asset value (NAV), weighed down by unfavourable currency movements and a weak showing at New Look, its British no-frills clothing chain.
The share, which lost 18.84% over the previous seven days, was mid-morning 3.41% stronger at R64.64.
