JSE lower as retailers continue slide

Jan 31 2013 11:58
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Johannesburg – The JSE was lower in early morning trade with platinums providing some support‚ while retailers were once again under pressure after a large pullback on Wednesday due to a worse than expected Cashbuild (CSB) trading update. The local market is awaiting the December PPI and December trade data due later today.

At 9:26 the JSE All Share [JSE:J203] index was 0.25% lower at 40 358.14 points‚ with the Top 40 - (Tradeable) [JSEJ200] index giving back 0.26% to 35 987 points. Platinums were 0.18% higher‚ while retailers gave back 1.16%.

Elsewhere‚ the Hang Seng Index in Hong Kong was 0.53% lower at 9:46.

Since the release of the shock South African R21bn October deficit the market has started to pay close attention to the trade figures‚ Rand Merchant Bank said in a note.

“As such‚ the market could react positively to the expected narrowing in the December deficit. We could even receive a positive read which would go down very well. However‚ that the trade data is extremely volatile and so two-way risks are evident from the data release‚” the bank said.

US fourth quarter 2012 GDP figures really shocked‚ dropping 0.1% quarter on quarter (q/q) against an expected 1.3% q/q increase‚ RMB said.

“This was the first decline in three years. If the economy declines again in the first quarter of this year then the US would technically be in a recession. However‚ things are not nearly as bad as they look. The US Federal Reserve statement last night can also mostly be ignored. Policy was left unchanged and there was no notable change in the statement‚” RMB said.

“Stats SA is scheduled to release the December PPI survey later this morning. We forecast a rise to 5.5% year-on-year in PPI from 5.2% in November. The acceleration in the annual number is largely due to the mining component rising off a low base‚” the bank said.

Among individual shares on the JSE‚ Lonmin (LON) added 3.11% to R46.40‚ while Impala Platinum lost 1.51% to R161.50.

Retailers continued their downward spiral of Wednesday‚ with The Foschini Group (TFG) giving up 2.14% to R114.50‚ Cashbuild dropped 2.69% to R133 after losing more than 8% of its value on Thursday due to a negative trading update. Shoprite (SHP) retreated 3.48% to R163.60‚ JD Group (JDG) was off 2.51% to R39.97‚ Woolies (WHL) relinquished 3.51% to R60.25 and Mr Price (MPC) declined 2.37% to R114.71.

Poultry producer Astral Foods (ARL) shed 4.35% to R89.86 after shedding more than 7% on Wednesday after the company said it anticipated its headline earnings per share in the six months to March to drop by between 75% and 95% from the same period a year ago.

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