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Johannesburg - Better-than-expected news on the South African economy gave the rand another boost on Friday as the currency continued its rally of the last few days, with share prices on the JSE hardly moving in line with the stronger rand.
With the rand trading at R13.40 to the dollar,
compared to an intraday low of R13.86 on Monday, share prices dropped back
initially for the second day. The major indices recovered somewhat later on but
were barely in the black by mid-morning on Friday.
The news that mining production in August was 6.9% higher
than a year ago surprised the market and improved sentiment towards the
rand.
The most recent manufacturing data also surprised on the
upside, and all eyes will now be on the latest retail data, which will be
published later this month.
Besides good news about the South African economy, which
increased demand for the rand, the dollar’s strong run of late was also brought
to a halt by the more dovish comments from the Federal Reserve in the minutes
of its latest meeting. The rand is now trading at its strongest level since September 27.
By mid-morning the All-share index was only 0.03% higher at
57 763 points, while the Top 40 index was unchanged at 51 351 points. This was
mainly due to the Industrial index losing 0.24% as the big dual-listed shares
in the index, which earn most of their income in foreign currencies, earn less
in rand if the local unit is strong.
The Resources index also usually loses ground when the rand
is firm as mining companies sell their commodities in dollar, but mining company shares gained in response to increased production
figures. The Resources index was 0.44% stronger by mid-morning.
The star performer in the resources sector was Kumba
[JSE:KIO], which gained more than 5% in early morning trade. Kumba hardly
moved over the past 30 days as iron prices dropped back sharply on overproduction fears, but some analysts now say that the correction might soon be
overdone.
The share responded by gaining 4.50% by mid-morning to a
new 52-week high of R246.25, reaching as high as R249.60 in early trade. It gained almost 50% over the past 90 days.
Shares connected with Kumba also traded on 52-week highs.
Exxaro [JSE:EXX], which owns 20% of Kumba, lifted 1.67% to a new high of
R143.05. The stock gained more than 48% over the past 90 days.
Anglo American [JSE:AGL], Kumba’s holding company, at
mid-morning was 0.51% higher at R258.00. On Thursday last week Anglo stood on a new
52-week high of R264.11 and before Friday’s trade it was already 48% stronger over
the previous 90 days.
Glencore [JSE:GLN] was 1.64% higher on a high of R66.15, just 1 cent higher than the previous 52-week high. BHP Billiton [JSE:BIL]
was 0.51% stronger at R258.00.
Among the busiest industrial shares, Naspers traded 0.47%
lower at R3 185.06 but Aspen [JSE:APN] added 0.33% to R320.24.
A stronger rand is good news for financial shares, and the Financial index gained 0.29%. Some of the top banks were among the busiest
shares on the JSE. Barclays Africa [JSE:BGA] was however only 0.03% higher at R146.59 and
Standard Bank [JSE:SBK] gained only 0.24% to R167.90. FirstRand [JSE:FSR] was 0.33% lower
at R54.20.
Capitec [JSE:CPI], which crept up more than 4% over the previous seven days, was however on a new 52-week high. The share jumped 1.08% to a high of R935.28.
