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Johannesburg - Local stocks followed their overseas peers higher on Thursday, as the uncertainty about tonight’s State of the Nation address in Parliament seems to be have been discounted.
After lacklustre
performances earlier in the week on the back of political uncertainties, the
markets concentrated on better company results with markets in Asia and Europe
strengthening on Thursday.
The JSE followed suit and
the industrial and financial markets were much firmer. Resources shares were
marginally lower as commodity prices took a breather after
Wednesday’s strong gains.
By mid-morning the Industrial index - with most of the big dual-listed shares which represent almost half of the JSE’s market value -was already 0.93% stronger. The Financial index gained 0.74% on the back of a stronger rand which recovered to R13.41 to the dollar, before losing ground again to R13.47.
READ: Rand treads water as violence threat hangs over SONA
The result was that the All-share
index at mid-morning was 0.43% higher at 52 027 points, while the Top 40 index
traded 0.52% stronger at 45 155 points.
Resources shares were
0.67% lower as the firm rally in commodity prices took a breather on Thursday
after Wednesday’s strong gains. The copper price had a strong run on Wednesday
when two of the world’s biggest copper mines said they would have to cut
production due to a strike and regulatory problems. The index
traded softer by mid-morning.
There was some early
profit-taking in the gold sector, but the Gold index at mid-morning was 0.02%
higher as the gold price continued its run on the back of political
uncertainty and gained 0.65% to $1 242 per ounce. The platinum
price was 0.58% higher at $1 018/oz.
The mood on global markets received a boost in Asia on news that the Chinese production price index reversed the declining trend of late, improving the prospects for company results. Chinese shares rallied pulling Asian shares to the highest in eighteen months.
European markets
also improved further on strong company results. When the dual-listed shares
trade higher in Europe, prices of local listings usually follow.
MTN [JSE:MTN], which
shocked the local market on Wednesday with the news that it is expecting a loss
for 2016, was again the centre of attention. The share recovered strongly and at mid-morning was 2.51% higher at R118.30. It lost more than 3% of its
value on Wednesday shortly after announcement and closed 1.71% lower. Before Thursday's trade the stock was 7.75% lower over the previous seven days.
Among the heavyweights
in the industrial sector, Naspers [JSE:NPN] gained 1.03% to R1 157.05 and
Richemont [JSE:CFR] in brisk trade gained 0.42% to R99.91.
There is still remarkable
activity in the shares of African Phoenix Investments [JSE:AXL], the new
listing that arose from Abil, the former holding company of African Bank.
More than 9 million shares were sold for R22m and the share price lifted
4.65% to 45c. It traded at 31c
when Abil’s listing was suspended, but since the new entity was listed last week has closed as high as 52c.
Among the top banks,
which have all been under pressure lately, Barclays Africa [JSE:BGA] performed the
best, gaining 1.57% to R157.04. FirstRand [JSE:FST] was only 0.43% higher at
R49.60 and Nedbank [JSE:NED] 0.42% stronger at R236.15.
The two biggest insurers,
Sanlam [JSE:SLM] and Old Mutual [JSE:OML], which have been under pressure in the last
week, also recovered. Sanlam was 1.13% higher at R62.70 after losing 4.6% over
the previous seven days and Old Mutual gained 0.46% to R34.65
BHP Billiton [JSE:BIL] lost 1.28% to R224.03 and is now more than 8% softer over the past seven days. As expected, the company announced on Thursday morning that it has approved its $2.2bn share of investment for the second phase of the Mad Dog oilfield in the Gulf of Mexico. Anglo American [JSE:AGL] lost 2.46% to R217.02.
