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Johannesburg - South African investors were mostly on the sidelines on Thursday as the world waits for the outcome of the historic referendum in Britain on the country’s future membership of the European Union.
Share prices in Britain traded near a two-week high on Thursday as recent opinion polls showed the "remain" camp was nudging ahead in the campaign, but local investors were not as enthusiastic.
It could however be that the firm rand, which continued with its strong rally on Thursday for the fifth consecutive day, put a damper on demand for the big dual-isted shares which represent most of the JSE’s market capitalisation and turnover.
The currency traded at new seven-week highs against the dollar on Thursday, aided by a surprise slowing of inflation locally and improved risk conditions abroad. By mid-morning on Thursday the unit traded more than 1% higher than the previous day at R14.42 to the dollar.
READ: Rand on front foot on surprise CPI, 'Bremain'
Investors largely ignored election-linked violence in the capital Pretoria, where two people were shot dead.
The rand has gained more than 5% this week, rallying along with other emerging risk assets as the likelihood increased that the referendum on EU membership would see Britain remain part of the economic bloc.
By mid-morning the All-share index was 0.38% higher at 53 765 points and the Top 40 index had gained 0.18% to 47 637 points. These gains were mainly due to the Resources index, which strengthened 1.10% in morning trade.
Resources shares took their cue from the London Stock Exchange, where the mining index gained more than 1.8% following a rise in copper prices. Commodity prices were supported by the weaker dollar, which faltered after Janet Yellen, chair of the Federal Reserve, poured cold water on the chances of a hike in US interest rates in July.
Glencore [JSE::GLN] was the top gainer in the FTSE 100-index in London, improving by more than 3%, while Anglo American [JSE:AGL] and BHP Billiton [JSE:BIL] also firmed.
The gains on the JSE were less impressive, and Glencore by mid-morning was only 1.89% higher at R32.90. Anglo American gained 1.37% to R147.00 and BHP Billiton 0.12% to R185.26.
Financial shares were only 0.45% higher while the Industrial index, which includes most of the dual-listed shares with huge market capitalisations, gained only 0.13% at mid-morning.
These big shares are regarded as rand hedges for South African investors, as they earn most of their income abroad in foreign currencies and gain more in rands if the currency is weak, and less if it is strong.
Most of these shares moved very little or hardly at all. Naspers [JSE:NPN] was only 0.13% higher at R2 234.94 but SABMiller [JSE:SAB] dropped 0.50% to R915.50. Richemont [JSE:CFR] was also 0.59% down at R90.69.
In the financial sector Standard Bank [JSE:SBK] gained 1.75% to R130.73 and FirstRand [JSE:FSR] was 0.82% stronger on R46.58, but the dual-listed Old Mutual [JSE:OML] lost 0.48% to R41.90.
Woolworths [JSE:WHL] made a strong run in the retail sector and traded 2.68% higher at R83.89.
