Markets close firmer, but banks remain under strain

Cape Town - South African markets ended firmer, supported by rand-hedges, while banks and retailers remained under pressure as investors review the implications of the most recent credit ratings downgrade. 

At the close of the JSE the rand had weakened by 1.5% to R13.93, supporting local commodity shares. 

The blue-chip JSE Top 40 climbed 0.73% whilst the broader All Share Index firmed 0.54% - carried by rand hedges and diversified miners. The Resources Index rose 1.6% and the Industrial Index firmed 0.39%. The Financial Index emerged marginally higher with a 0.04% positive move.  Weak precious metal prices saw the JSE Gold Index close 3.01% lower.

The top performing company on the Top 40, Mediclinic [JSE:MEI], climbed 3.8% on the back of a positive update regarding Swiss regulation.

Mediclinic’s Swiss company, Hirsladen, is expected to have a limited increase in costs after The Zurich Cantonal Parliament voted not to approve a levy targeting privately insured patients treated in listed hospitals. 

BHP-Billiton [JSE:BIL] saw a 6% surge that settled at +3.7% after it emerged that activist fund Elliot Management outlined a restructure that would see BHP scrap its London Stock Exchange listing and offload a large US petroleum asset.

Elliot claimed that the deal could unlock value and improve capital returns to shareholders by as much as 50%.  This suggestion was publicly rejected by BHP due to high costs associated with the deal, cooling off the jump in the share price. 

Naspers [JSE:NPN] climbed 1.7% after it emerged that it has been linked, along with Tencent, in a deal to partner as a strategic investor in eBay India.

The acquisition will be facilitated through an equity stake in Flipkart, India’s largest online retailer. This new deal contributes to an interesting few weeks for Naspers linked companies, with Tencent buying 5% of Tesla and SOUQ.com and Naspers’ recent disposal of Allegro, an online Polish market place.

International markets

Crude oil prices increased by 1.07% to $55.83/bbl as a strong level of demand and continued global uncertainty after the US missile strike in Syria.

Gold prices softened by 0.11% to $1252/Oz and Platinum drooped 1.19% to $938.06/Oz.

At the close of local markets, the US markets were trading flat as investors wait for this evening’s presentation by Federal Reserve Chair Janet Yellen at the University of Michigan.

Investors expect Yellen to give a road map on how the Fed plans to offload the $4.5trn in assets it holds on its balance sheet, and address concerns regarding Fed official’s ominous announcement that they consider the US equity market to be over-valued.  

*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.