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Financials rally on the back of the firmer rand

Sep 12 2019 18:12
Musa Makoni*

The JSE advanced on Thursday along with other global stocks as investors were optimistic on the back of the European Central Bank's rate decision.

Focus was primarily on the ECB which cut the deposit rate by 10 basis points to -0.50% and announced a restart to its quantitative easing program from November 1, with net purchases of 20 billion euros per month.

The US and China are taking steps to ease trade tensions between the two sides ahead of their scheduled meetings in the coming weeks, with both sides announcing delays and exclusions in some of the tariffs which are due to kick in soon. This positive sentiment saw markets in Asia close mostly firmer while in the US the major indices opened marginally higher.

On the currency market, the euro against the greenback advanced following the ECB's press conference. This saw the rand also gain against the US dollar to a session high of R14.55/$. At 17:00, the rand was trading 0.46% firmer at R14.60/$.

Aspen Pharmacare [JSE:APN] surged on the back of its full-year results which were released after the close on Wednesday. The company scrapped its full-year dividend in order to contain its debt levels. The stock rallied 10.97% to close at R94.25.

Platinum miners had a good outing with stocks such as Impala Platinum [JSE:IMP] surging 6.37% to close at R5.39, Anglo American Platinum [JSE:AMS] gained 5.72% to close at R897.05, and Northam Platinum [JSE:NHM] closed at R77.00 after adding 5.48%. Barloworld [JSE:BAW] managed to post gains of 3.81% to close at R118.76, while Murray and Roberts [JSE:MUR] climbed 4.74% to close at R13.70. Naspers [JSE:NPN] extended its gains as it climbed 2.23% to close at R2 519.98.

Commodity trading giant, Glencore [JSE:GLN] struggled in today's session as it fell 1.47% to end the day at R45.47, while diversified miner South32 [JSE:S32] dropped 0.615 to R27.52.

Luxury goods retailer, Richemont [JSE:CFR] weakened by 1.31% as it closed at R118.10, while oil and gas producer Sasol [JSE:SOL] shed 0.69% to end the day at R278.70. Other significant losers on the included Telkom [JSE:TKG] which lost 1.48% to close at R75.86, MTN Group [JSE:MTN] which shed 0.62% to R99.20, and Hammerson [JSE:HMN] which closed at R46.88 after falling 4.09%.

The JSE Top-40 index eventually closed 0.81% higher while the broader JSE All-Share index gained 1.1%. All the major indices advanced on the day led by the financials index which rallied 2.04%. The industrials and resources indices gained 0.79% and 0.61% respectively.

Brent crude tumbled as data showed that the US was producing more oil than some of OPEC's biggest members. The commodity was trading 2.48% lower at $59.30/barrel.

At 17:00, palladium was up 2.54% to trade at $1614.35/Oz, platinum was up 0.98% to trade at $954.55/Oz, and gold had gained 0.94% to trade at $1510.88/Oz.

JSE winners and losers, September 12

Musa Makoni is a trading specialist at Purple Group.

equities  |  markets  |  currencies
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