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Johannesburg - Financial shares were the star performers on the JSE on Thursday. The Financial index is still trying to recover the losses suffered earlier this year, when Pravin Gordhan was sacked as minister of finance.
Standard Bank [JSE:SBK] reached a new 52-week high, while the other banking shares were also higher.
By mid-morning the Financial index was 1.38% firmer at 42 604 points, but still about 500 points lower than the level it was at before Gordhan’s sacking, which led to a downgrade of South Africa’s credit rating.
The strong move by the financial sector also helped the rest of the market higher and by mid-morning the All-share index was again 0.57% higher at a new all-time high of 55 512 points. The index, which closed on new highs on Monday and on Tuesday, lost some ground in late trade on Wednesday, but resumed its upward path on Thursday.
The Top 40 index was 0.55% higher at 49 070 points, which is also a new record.
The rest of the market was lacklustre with the Industrial index only 0.18% higher and Naspers [JSE:NPN] trading lower, while the Resources index was 0.61% higher.
On March 15 this year the Financial index traded on a 52-week high of 43 050 points. It dropped more than 8% to only 39 528 on April 4, as financial shares are most affected by a weaker credit rating.
Standard Bank [JSE:SBK] was 1.99% higher at R166.02, after the share dropped as low as R137.20 after Gordhan’s dismissal. It has been particularly strong over the past month, gaining more than 17% over the past 30 days.
Nedbank [JSE:NED] was 1.75% firmer at R221.92, although the bank announced a drop of almost 3% in its headline earnings for the first six months of the year. The lower earnings were caused by a disappointing contribution from its Nigerian investment Ecobank, which is affected by difficult economic conditions in West Africa.
Nedbank’s local banking activities performed strongly, but its share price is still more than 17% lower for the past 90 days.
Barclays Africa [JSE:BGA], which also announced lower earnings earlier this week, traded 1.68% higher at R144.90. FirstRand [JSE:FSR], which gained more than 7% over the previous 30 days, was 1.79% stronger at R52.99.
MTN’s [JSE:MTN] share price jumped to R124.50 in early trade, but then started to lose ground and at mid-morning was 1.62% softer at R117.32. Investors started to take profits as the group’s results are already discounted in the share price. Africa’s biggest mobile phone operator announced on Thursday that it returned to profit in the first half of the year.
Headline earnings came in at R3.9bn ($294.40m), or 212 cents per share, in the six months to end-June compared with a loss of R4.9bn or 271c/share a year earlier.
Naspers, the biggest share on the JSE, was 0.88% softer at R2 824.80. Technology shares worldwide have been under pressure due to some profit-taking. Tencent, the Chinese internet giant of which Naspers owns 34%, traded 1.28% lower at $HK308.50, after reaching a high of $HK316.80 earlier in the week.
British American Tobacco [JSE:BTI] gained 1.68% to R827.38 and Sasol [JSE:SOL] traded above R400 for the first time since May, gaining 1.57% to R400.55.
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