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Johannesburg - Share prices on the JSE continued to move sideways on Friday and the major indices will close the week almost unchanged, as the strong rand continues to hurt demand for rand hedge shares.
The uncertainty caused by Moody’s decision to downgrade China’s credit rating - as well as pressure on the oil price after Opec could not agree on further production cuts - also put a damper on the demand for financial instruments in emerging markets.
The rand received a boost this week from inflation figures which were far better than expected, as well as reports indicating that President Jacob Zuma will meet strong opposition at this weekend’s meeting of the ANC’s National Executive Committee.
The rand traded 0.50% lower on Friday than Thursday’s close, but at R12.95 to the dollar is still at the highest in two months. That means the dual-listed shares - and in particular resources shares, which earn most of their income in foreign currencies - receive less in rand for their products and services.
European markets are also lower which is further bad news for the dual-listed shares, most of which are listed in Europe and on the London Stock Exchange.
By mid-morning the All-share index on the JSE was 0.27% lower at 53 881 points, while the Top 40 index, which includes most the dual-listed shares, lost 0.29% to 47 433 points.
The Industrial index was 0.05% lower, with Naspers [JSE:NPN] losing 0.01% to trade at R2 790 after earlier trading at a new intraday all-time high of R 2805.99. British American Tobacco [JSE:BTI] was 0.71% higher at R921.30 but Richemont [JSE:CFR] lost 0.12% to R107.59.
The Financial index lost 0.70% as the top banking shares fell victim to profit-taking after strong gains earlier in the week on the back of firm and better-than-expected inflation figures. FirstRand [JSE:FSR] traded 0.97% lower at R50.57 while Standard Bank [JSE:SBK] lost 1.67% to R152.36.
The Resources index hardly moved, with BHP [JSE:BIL] 0.11% higher at R201.85 and Glencore [JSE:GLN] gaining 0.45% to R48.75.
Impala Platinum [JSE:IMP], which lost almost 10% of its value on Thursday, traded 0.48% higher at R37.68. Impala announced that it will issue bonds to the value of more than R6bn which can be converted into shares, and investors are afraid that it will dilute their existing shareholding.
Sasol [JSE:SOL] reacted negatively to the news that Opec did not extend cuts in oil production and lost 1.13% to R993.43.
Retail shares, which dropped sharply on Thursday after negative results from Edcon and a warning from Massmart [JSE:MSM] that the current political uncertainty is hurting sales, were again in the spotlight.
Massmart, which lost almost 10% over the past week, recovered somewhat and was 0.73% higher at R111.81. The Foschini group [JSR:TFG] gained 1.44% to R134.24 after the group said it would buy Australian menswear chain Retail Apparel Group (RAG), which will add more than 400 shops in Australia.
