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Johannesburg - The rand’s resilience against a record-breaking dollar overshadowed the local financial markets once again on Wednesday.
The currency, which lost ground on Tuesday, bounced back strongly on Tuesday evening and traded on Wednesday morning more than 1% higher at R13.97 to a dollar, compared to R14.13 the previous day. That put a cap on the prices of the dual-listed shares, which represent a major part of the JSE’s market capitalisation. The losses on the JSE were, however, very modest.
Analysts are uncertain to call the rand’s next move as the dollar held on Wednesday near 14-year peaks as global yield spreads continued to shift in its favour. The Federal Reserve’s continued tightening means that that the yield premium between the US and emerging markets will continue to widen and it could lead to an outflow from these markets back the US.
Benchmark 10-year US yields have climbed almost 80 basis points since early November to reach 2.57%. Data from the Institute for International Finance showed non-resident investors had pulled $23bn from emerging market portfolios since early October.
Emerging markets did, however, recover somewhat on Tuesday and that helped their currencies to recover, with the rand and the Russian rouble the biggest winners.
The JSE's All-share index was midmorning on Wednesday only 0.13% lower at 50 277 points, while the Top 40 index was 0.21% weaker at 43 664 points. All the major indices were moderately lower except the very volatile gold index which traded 1.44% higher after similar losses on Tuesday.
The industrial index, which includes most of the big dual-listed shares, was only 0.02% softer and the financial index also lost only 0.02%. The big dual-listed commodity shares pulled the resources index 0.40% lower. Slightly softer European markets put a damper on the local market.
Among the big dual-listed shares in the industrial index on the JSE, the share price of Naspers [JSE:NPN] was again 0.80% lower on R1 984.50. The share price closed on Tuesday evening for the first time since December 8 above R2 000, but was still more than 9% lower over the past 30 days.
Richemont[JSE:CFR] was 0.38% stronger at R91.66 and Steinhoff [JSE:SNH] recovered 0.81% to R870.70 after it lost almost 7% over the previous seven days on the news of a possible tie-up with Shoprite [JSE:SHP]. Shoprite was 0.30% higher after it lost almost 10% over the previous seven days.
Among the other retailers Mr Price [JSE:MRP] lost 0.92% to R156.00, but Woolworths [JSE:WHL] was 1.36% higher at R69.25.
Anglo American[JSE:AGL], which reached a 52-week high of R220.70 on 23 November, continued its downward trend and lost another 0.75% to R196.31 on softer commodity prices as traders are taking profits at the end of the year. Before today’s trade the share was 7.55% lower over the previous seven days.
BHP Billiton [JSE:BIL], which lost almost 5% over the previous seven days, was another 0.48% softer at R223.80. Glencore [JSE:GLN] was, however, 0.60% higher at R47.33 after losing more than 10% over the previous seven days.
Impala [JSE:IMP] regained 1% to R42.42 on the back of a slightly higher platinum price after it lost more than 20% over the previous month. The share was the busiest on the JSE in quiet trade and almost 2 million shares were traded in early trade for more than R8m.
Nedbank [JSE:NED] and RMB Holdings [JSE:RMH] both set new intra-day 52-week highs in early trade on Wednesday, but then lost momentum. Nedbank was at a new high of R239.99, but traded midmorning 0.03% softer on R228.22. RMB Holdings set a high of R67.88, but was midmorning only 0.15% higher on R65.84.
