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JSE gains as weaker rand pushes indices higher

Nov 13 2017 13:06
David van Rooyen

Company Data

Sibanye Gold Limited [JSE:SGL]

Last traded 12
Change -1
% Change -7
Cumulative volume 19396166
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 298
Change -2
% Change -1
Cumulative volume 1964872
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 602
Change -24
% Change -4
Cumulative volume 1593407
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - The major indices on the JSE pushed higher on Monday again despite fears that the South Africa’s state finances could implode.

Reports on Monday that the head of budget department of treasury resigned because of the interference in budget matters by the presidency, led to the rand tumbling further to the lowest level in more than a year, but the weaker rand supported share prices trading at levels close to all time highs.

All the major indices traded higher by mid-morning as the softer rand means that the big dual-listed shares earn more in rand from their foreign earnings, which made up the biggest part of their income.

The rand mid-morning was another 1.47% lower at R14.45, a level last seen in September last year, as investors are still nervous about the possibility that President Jacob Zuma might soon announce free higher education, which will cripple the state’s finances to the extent that the international rating agencies will have no other option to downgrade South Africa’s credit rating even further, which could lead to a massive outflow of capital.

Zuma’s office denies that the President will announce such a move, but if more senior Treasury officials are leaving it will be easier for him to execute such a move,  which could cost up to R40bn per year, which the government does not have.

The result was that the All-share index was just below its all time high mid-morning at 60 061 points, after it gained 0.48% in morning trade. The Top 40 index was 0.59% higher at 57 749 points. These indices were pushed higher by the industrial index, which includes most of the big dual-listed shares with the big market capitalisations.

The industrial index was mid-morning 0.68% stronger at a new all time high of 90 420 points, with big capitalisation shares such as Naspers [JSE:NPN], Richemont [JSE:CFR], British American Tobacco [JSE:BTI] and Steinhoff [JSE:SNH] all trading solidly higher. The industrial index is now more than 15% higher over the past ninety days and 8% over the past thirty days.

It was mainly due to Naspers, which represent almost one fifth of the JSE’s market value, which was before today’s trade already 19.1% higher over the previous thirty days and 47.1% over the previous ninety days.  The share gained another 1.36% to R3 589.03, just below the all time high set last week of R3 632.35.

Steinhoff was the busiest share on the JSE as it staged a recovery after losing more than 7% over the previous seven days on regulatory issues. The share price was mid-morning 1.79% higher at R57.00 after 3.2 million shares were sold for R183 million.

British American Tobacco was 0.87% higher at R938.60. That means that the share price, which gained more than 9% over the past month, is now less that R6.00 below the 52 week high of R944.13. Richemont traded 0.44% stronger at R125.64.

Vodacoms’s [JSE:VOD] share price dropped sharply after the company cut its half-year dividend by 1.3% to R3.90 a share, partly due to the impact of issuing shares for the purchase of a 35% stake in Safaricom, Kenya’s biggest company. Earnings per share excluding one-time items rose 1.1% to R4.45, while sales rose 4.6%. The share price was mid-morning 3.47% lower at R147.15.

The company also said that said revenue from data services surpassed voice for the first time in South Africa. First-half data sales in South Africa advanced 15% to R11.4bn. MTN [JSE:MTN] was 0.65% stronger at R128.19.

Anglo American [JSE:AGL] was back again at a 52 week high after the share price traded 0.29% higher at R282.40. The share was before today’s trade still 13.8% stronger over the previous thirty days and a massive 53.8% over the previous ninety days.

The resources index did not respond as much to the weaker rand as the industrial index and and was mid-morning only 0.34% higher 39 300 points. However, this was enough to set a new intraday 52 week high.  BHP [JSE:BIL] gained only 0.08% to R271.22 and Glencore [JSE:GLN] lost 0.41% to R68.67.

Sibanye [JSE:SGL] was the busiest share in the gold index which gained 1.48% and the share price was 0.64% higher at R20.47.

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