JSE wipes out losses as major indices gain ground

Johannesburg - The upward momentum on the JSE pushed the Top 40 index to a new intraday all-time high on Wednesday, despite the rand recovering somewhat and some of the high-flying shares of the last few weeks losing ground on profit-taking.

By mid-morning the Top 40 index was 0.32% higher on an all-time high of 50 300 points, while the All-share index was 0.28% up at 56 513 points. At that stage it was only 0.25% below a new record.

That means that all the losses of the last few weeks have been wiped out. The All-share index gained 4.37% over the past 90 days and is now 10.6% higher for the year to date. The Top 40 index is now 5.48% higher over the past 90 days and has gained 13.5% for the year to date.

Much of the market’s gains have to do with the weaker rand, which is currently more than 6% softer than a month ago. The local unit traded at R13.60 to the dollar on Wednesday, compared with R12.79/$ on September 5.

A softer rand means that dual-listed companies, which earn most of their income abroad, receive more for their foreign income in rand.

The rand’s weakness is the result of expectations that US interest rates will be hiked soon. The unit reached its lowest level in six months at R13.77/$ on Tuesday, but regained some ground on speculation that US President Donald Trump’s choice for the next Federal Reserve chair could be less hawkish than expected.

There has also been no bad news for the market, with the latest economic indicators showing that credit extension grew, new car sales jumped and the surplus on the trading account continued.

The Industrial index, which includes many of the dual-listed shares which benefit most from the softer rand, was 0.29% higher at 84 953 points, which is also a new record. The index gained only 2.74% over the past 90 days but is already more than 18% higher for the year.

The Financial index lifted only 0.09% and the Resources index traded only 0.40% higher by mid-morning, as shares such as Anglo American and Kumba dropped back due to profit-taking after reaching 52-week highs on Tuesday.

The Industrial index’s strong performance is mainly due to Naspers [JSE:NPN], which established a firm foothold above the R3 000 on Tuesday. The share, which is by far the biggest in the index, traded 0.97% higher on a new all-time high of R 3 088.33. Naspers is now almost 10% higher over the past 90 days and 51.8% up for the year to date.

Richemont [JSE:CFR], also one of the biggest shares in the Industrial index which was on a 52-week high, lost some ground on Tuesday. The share traded 0.91% lower at R124.60 after gaining more than 17% over the past 90 days and 38.5% for the year to date.

Steinhoff [JSE:SHF] was one of the busiest shares on the JSE with more than 3 million shares sold, but the share price was only 0.17% higher at mid-morning at R59.10, after losing more than 0.5% in early trade.

Its African subsidiary, Steinhoff Retail Africa [JSE:SRR], which was listed on September 19, is however going from strength to strength. The share, which was listed at R21.59, traded 0.23% higher on a new high of R23.15.

Anglo American [JSE:AGL] was unchanged on its 52-week high of R253.55, but in early trade was more than 2% lower at R247.41 as investors used the opportunity to take profits. Kumba [JSE:KIO],which closed on a 52-week high of R236.21 on Tuesday, was 1.81% softer at R231.94. Sasol [JSE:SOL] was 2.25% stronger at R376.30.

FirstRand [JSE:FSR], which lost more than 7.7% over the past 30 days after it reached a 52-week high of R52.76 on August 24, was 1.45% softer at R51.50.

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