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Johannesburg - Share prices globally took a breather on Thursday from recent highs, and all major indices on the JSE were also lower.
In contrast with world markets, where there was a bit of profit-taking from recent highs, the JSE has hardly moved at all lately and the market was again struggling for direction. Before Thursday’s trade the All-share index was 0.06% lower over the past 90 days and the Top 40-index lost 2.18%.
The two indices on the JSE which have shown some momentum lately - the Financial and Resources indices, which both gained more than 7% over the past 30 days - were the big losers on Thursday.
The Financial index was mainly pulled down by insurance shares, with Old Mutual [JSE:OML] softer in response to disappointing results, while the big resources conglomerates lost ground in the resources sector.
At mid-morning on Thursday the All-share index was 0.54% lower at 51 937 points and the Top 40 index 0.59% down at 44 864 points. At that stage the Financial index had shed 0.98% and the Resources index 0.93%. The Industrial index held its own despite the FTSE-index in London losing ground, and was only 0.16% softer.
The demise in world markets started on Wednesday afternoon on Wall Street, where the indices were at record levels but fell back when a sharp drop in the oil price hurt energy shares. Oil prices tumbled on news of a surprising jump in US government stockpiles and Brent crude on Thursday morning traded at $453.88 a barrel.
In Asia shares fell back from a one-year high and in Europe the DAX index, which gained more than 20% this year, as well as the FTSE-index which is on a 14-month high, opened lower on Thursday.
There was more evidence of the slowdown in the British economy after Brexit when a survey found that house price growth and transactions fell to the lowest level in years last month. The Royal Institution of Chartered Surveyors said its members cited uncertainty following the June 23 referendum and tax changes as the main reasons for the slowdown.
Old Mutual was the big mover on the JSE on Thursday when it lost more than 5% in early trade. The stock was one of the busiest on the JSE with more than 15 million shares trading for more than R558m. By mid-morning it was 5.47% lower at 36.74.
READ: Weak rand dents Old Mutual interim results
The Anglo-South African financial services firm posted a 9% drop in first-half operating profit to £709m on Thursday and said conditions were challenging in its core markets. Cash flow was also 13% lower.
Old Mutual also announced that it has agreed to sell Old Mutual Wealth Italy to ERGO Italia, owned by Cinven. The consideration for the transaction is €278m in cash, plus interest to completion which is expected in about six months.
The sale is the final part of the divestment of Old Mutual
Wealth’s continental European businesses, allowing it to focus on its UK and
cross border markets. Proceeds will be retained by Old Mutual for general
corporate purposes.
Other insurance shares were also lower. Sanlam [JSE:SLM], which
gained more than 15% over the last 30 days, lost 2.13% to R66.57 and was one of the busiest shares.
The major banks were also lower after a strong run
recently. Barclays Africa [JSE:BGA] lost 1.08% to R160.08 and Standard Bank [JSE:SBK] shed 1.04% to R149.90.
The two big dual-listed resources shares, BHP Billiton [JSE:BIL]
and Anglo American [JSE:AGL], both lost ground with BHP Billiton trading 1.40% softer at
R177.86 and Anglo losing 1.19% to R150.67.
The two biggest platinum shares, Anglo American Platinum [JSE:AMS] (Amplats) and Impala Platinum (Implats) [JSE:IMP], which are both at 52-week highs, continued their run. Implats, which is more than 52% higher over the past month, gained 4.09% to a new high of R70.23. Amplats traded 0.95% higher at a high of R474.16 after gaining more than 34% over the previous 30 days.
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