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Strong rand, low commodity prices weigh on JSE

Johannesburg - Commodity shares pulled the JSE lower on Tuesday as they were hit by the deadly combination of lower commodity prices and a stronger rand.

Most of the activity was however in the financial sector, where more than 7 million Old Mutual [JSE:OML] shares were sold, almost three times more than any other share in response to the group’s strong results.

By mid-morning on Tuesday the Resources index was already 1.34% lower and the Gold index traded 1.58% softer as the rand continued to trade at levels of around R13.30, compared with almost R13.50 last week.

The platinum price dropped more than 2% to $961 on Tuesday and the share prices of all the platinum producers were also lower. The gold price was also down.

The big dual-listed shares in the Industrial index were also lower (-0.49%) due to the stronger rand. As a result, the All-share index lost 0.51% to 55 472 points and the Top 40 index gave up 0.54% to 48 844 points.

Bucking the trend was the Financial index, which received some support from the stronger rand and traded 0.013% higher.

Global markets continued their recovery from last week’s sell-off, which limited the losses in dual-listed shares.

Commodity shares such as Anglo American [JSE:AGL] and BHP [JSE:BIL] were among the most traded on the markets. BHP was the biggest loser, trading 2.22% lower at R230.50 and Anglo American was 1.21% lower.

Glencore [JSE:GLN] lost only 0.14% to R57.05. South32 [JSE:S32], a Billiton offspring which on Monday closed on an all-time high of R32.12, traded 1.74% softer at R31.56.

Among the platinum producers Impala Platinum [JSE:IMP] lost 2.66% to R37.62 and Anglo American was 1.48% lower at R214.15. Lonmin [JSE:LON] gave up 0.74% to trade at R13.71.

Naspers [JSE:NPN], the biggest share on the JSE, lost 1.18% to R2 811.44. The stock traded lower after Tencent, the Chinese internet giant in which Naspers holds 34%, lost 1.6% on the Hong Kong Stock Exchange.

Sasol [JSE:SOL] was 1.33% softer at R401.10 and Steinhoff [JSE:SHF] gave up 0.25% to R66.84.

Most of the interest in the financial sector was in Old Mutual and more than 7 million shares were sold for R242m. The share price gained 1.74% to R34.81.

The dual-listed financial services group reported a 37% increase in its interim operating profit to £362m. Old Mutual’s pre-tax adjusted operating profit rose by 37% to £989m.

Its performance was buoyed by a 25% decline in the average sterling/rand exchange rate, as well as a profit from the disposal of Old Mutual Asset Management and a reduction in debt as it prepares to break up up into two listed entities in 2018. Old Mutual increased its dividend by 32% to 3.53 pence per share.

Sanlam [JSE:SLM] was only 0.38% higher at R69.03, despite the news that Sanlam Investment Holdings will buy 30% of EasyEquities from the listed Purple group. Sanlam will pay R100m cash for the stake and will receive representation on the EasyEquities board. The Purple group was unchanged at 43c/share.

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Rand - Dollar
18.92
-0.1%
Rand - Pound
23.89
-0.0%
Rand - Euro
20.44
+0.1%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.1%
Platinum
909.30
+1.4%
Palladium
1,015.00
+1.3%
Gold
2,221.01
+1.2%
Silver
24.85
+0.8%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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