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Johannesburg - Share prices on the JSE were drifting lower on Friday as a weaker rand hammered financial shares. At mid-morning the Financial index was already 1.26% down on the back of a slightly weaker rand. Investors were taking profits after the strong gains of the past months on the back of a rampant rand.
The rand slipped 0.58% at R13.58 to the dollar after reaching R13.22 the previous day. The currency weakened after the dollar, which has been under pressure lately, recovered somewhat on Thursday on the back of strong US corporate results and retained those gains on Friday.
The banks have also been supported lately by the fact that South Africa retained its investment grade credit ratings after analysts said the sector offers good value. All the major banks recently traded at 52-week highs, but have since fallen victim to profit-taking.
All the other major indices on the JSE were moderately lower by midday.
A stronger dollar is detrimental to resources as it makes commodities more expensive for buyers in other currencies, which meant the Resources index lost 0.55% by mid-morning.
A softer rand is however good for the dual-listed shares which represent a major part of the JSE’s market value, but the Industrial index with most of these shares was still 0.60% softer.
The result was that the All-share index was 0.74% lower at 53 013 points and the Top 40 index traded 0.75% weaker at 46 148 points.
Financial shares were the busiest on the JSE in terms of volume. The Banking index traded 1.57% lower and the life insurance index lost 1.43%.
FirstRand [JSE:FSR] was the busiest share in the banking sector and lost 1.85% to R51.47. As recently as January 3 the stock traded at a 52-week high of R54.17; it is still more than 9% higher over the past 90 days and 24% for the past year.
Standard Bank [JSE:SBK], which earlier this month was at a 52-week high of R155.33, lost 2.19% to R146.40. The banking group is almost 40% higher for the past year. Barclays Africa [JSE:BGA] lost 1.66% to R171.70 and recently traded as high as R171.70.
MMI Holdings [JSE:MMI] was the busiest share in terms of volume, and lost 1.76% to R25.68 after gaining more than 12% over the past 90 days. Sanlam [JSE:SLM], which was the second busiest share on the JSE, shed 1.37% to R66.85. The share gained 9% over the previous 90 days.
The dual-listed Old Mutual [JSE:OML], which gained more than 7% over the past month, was also 0.33% softer at R35.75.
Among the big capitalisation shares Naspers [JSE:NPN] lost 0.64% to R2 146.20 and Sasol [JSE:SOL] traded 1.82% softer at R401.80. Richemont [JSE:CFR] was however only 0.18% down at R103.56.
Anglo in the resources sector was 0.57% softer at R227.14.
