Share

MTN, SONA nerves dominate lacklustre JSE

Johannesburg - Most of the attention on the JSE on Wednesday was on telecommunications group MTN [JSE:MTN], which warned that it will report a loss for the 2016 financial year due in large part to the regulatory fine imposed on it by Nigeria, its biggest market.

MTN was one of the busiest stocks in terms of value and volume, and more than 6.2 million shares for more than R714m were traded by mid-morning.

READ: MTN share price hurt by full-year loss warning

At that stage the share price was already 3% lower at R114.19 after dropping more than 5% over the previous seven days.

MTN set the tone on another lacklustre day on the JSE as political uncertainty about the State of the Nation address on Thursday continues to put a damper on share prices and the rand, which dropped back to R13.51 to the dollar on Wednesday.

READ: Rand jittery ahead of Sona

With European markets also lower on fears that the far right in France might win the presidential election in that country and pull France out of the European Union, the big dual-listed shares on the JSE have been under pressure.

By mid-morning the All-share index traded 0.61% down at 51 864 points and the Top 40 index was 0.70% softer at 45 049 points. The Industrial index, which includes most of the big dual-listed shares, was 1.18% lower and the Financial index had shed 0.89%.

Resources were however higher, as the weak dollar supports commodity prices. The softer rand is also good for resources shares as exporters of commodities, which are priced in dollar, earn more for their exports in rand if the local currency weakens. By mid-morning the Resources index was 0.69% higher and the Gold index had gained 1.31%.

MTN’s share price has been on a steady decline since November 1015, when the share traded as high as R260. The share lost 16% over the past year and more than 40% over the past three years as its business activities in Nigeria experienced increasing difficulties.

The company said on Wednesday it expects to report a loss in both basic headline earnings per share and basic earnings per share for the year ended December 31 2016.

But it’s not only the Nigerian fine that’s to blame for the poor performance.

Other contributing factors to the negative numbers include foreign exchange losses in several operations; losses from joint ventures and associates; additional depreciation resulting from prior hyperinflation adjustments in MTN Irancell; and below par performances in South Africa and Nigeria.

Steinhoff [JSE:SNH] was almost as busy as MTN, with more than 6 million shares trading for R482m. The share gained more 4.3% over the past seven days but gave some of it back as it was already 1.45% lower at R67.77 at midday. Steinhoff, which is also listed on the Frankfurt Stock Exchange, lost almost 15% of its value over the past 90 days on uncertainty about its plans to move closer to Shoprite.

Naspers [JSE:NPN], which lifted more than 13% over the past 30 days, lost some of those gains on Wednesday and traded 1.70% softer at R2 152.65. British American Tobacco [JSE:BTI], which made steady progress over the past month gaining 7%, was 1.03% stronger at R839.62.

Glencore [JSE:GLN] was the top performer among the big commodity conglomerates, trading 2.89% higher at R54.46. Before Wednesday’s gains the share lost had 3.8% over the previous seven days.

BHP Billiton [JSE:BIL] was volatile and moved between negative and positive territory in a range between R231.987 and R237.32. By mid-morning the share was only 0.11% higher at R233.26 The company faces a strike at its Escondida copper mine on Thursday after contract talks mediated by the Chilean government failed to reach a deal, the main union at the world's largest copper mine told Reuters.

Retailer and wholesaler Spar [JSE:SPP] traded 1.50% higher at R176.61, after it posted a near 17% rise in sales in the last quarter, boosted by retail and local liquor sales. Group sales rose 16.9% to R25.6bn for the 13-week trading quarter ended December. Retail shares have been under pressure lately and Spar lost 8.56% over the previous seven days.

Sappi’s [JSE:SAP] share price staged a rally in early trade after the group announced that first-quarter profit increased 20% to $90m from $75m a year ago. This is due to greater sales volumes across all major divisions and higher prices for dissolving wood pulp. The share was at one stage 1.8% higher at R86.40, but lost momentum and at mid-morning was 0.34% softer at R84.50.

The group also said it will invest R4.12bn in North America and Europe to increase its packaging capacity.


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders