JSE posts slight rise as rand hedge shares shine

Johannesburg - Banking shares, which lost more than R34bn of their value on Tuesday, continued their slide on Wednesday morning but at a much slower rate than the day before.

The Financial 15 index, which was more than 2% lower on Tuesday after it became known that Finance Minister Pravin Gordan was summoned to appear in court on fraud charges, lost 0.41% by mid-morning on Wednesday.

The rand, which shed almost 4% on Wednesday in reaction to the news about Gordhan, also weakened further to R14.42 to the dollar, 0.33% softer than the previous day.

READ: Rand still roiling from Gordhan bombshell

That was however enough to support the rand hedges in the industrial sector, which gained 0.46% by mid-morning. The Resources index fell victim to some profit-taking in early trading but recovered and at mid-morning was 0.55% higher. The Gold index gained 1.76%.

The result was that the overall indices were moderately higher; the All-share index at mid-morning lifted 0.26% to 52 034 points and the Top 40 index was 0.33% stronger at 45 544 points.

The local market was not supported by a subdued mood on global markets after Wall Street weakened on Tuesday evening, following a poor start to the earnings season. Asian shares hit three-week lows on Wednesday morning and by mid-morning the markets in London and Paris were also lower.

Global markets are further hampered by high bond yields, which are at multi-month highs on growing expectations of a US interest rate hike in December. Markets are now discounting a 75% chance of an interest rate hike in December as they increasingly expect higher inflation because of US wage growth and the firmer oil price, which is close to one-year highs.

The spectre of rising US interest rates, which could lead to a reversal of investments from emerging markets such as South Africa to the US, helped lift the dollar’s index to the highest in seven months against a basket of six major currencies. That increased the pressure on the beleaguered rand.

The biggest three banks on the JSE, which were all more than 4% lower in Tuesday’s trade, again lost ground but the losses were more subdued. FirstRand [JSE:FSR] was the biggest loser, dropping 1.28% to R44.76 while Standard Bank [JSE:SBK] was 0.77% lower at R138.92. Barclays Africa [JSE:BGA] lost 0.91% to R149.13.

Nedbank [JSE:NED] bucked the trend and gained 0.44% to R217.59, while Capitec [JSE:CPI] was only 0.07% softer at R663.35. Before Wednesday's trade the stock was 13.9% higher over the previous 30 days.

Aspen [JSE:APN] continued to be one of the busiest shares on the JSE, with 1.9 million shares trading for more than R597m. The share has been highly volatile since last week, when GlaxoSmith Kline disposed of the final part of its stake in Aspen.

Before Wednesday's trade, Aspen’s share price was 2.85% lower over the previous seven days and 13.2% over the previous 30 days; however, the share reversed the trend on Wednesday morning and gained 2.25% to R312.37.

Naspers [JSE:NPN] was 0.75% higher at R2 349.74 and Richemont [JSE:CFR], which at one stage on Tuesday was more than 6% higher than the previous day, gained 1.5% to R93.02. Steinhoff [JSE:SHF] was 0.42% up at R75.91.

Sappi’s [JSE:SAP] strong run of the past week, during which the share price gained more than 10% over the previous seven days, culminated in a new intraday 52-week high. By mid-morning the share price was 1.22% stronger at a high of R77.43.

Anglo American [JSE:AGL] was the victim of profit-taking in early trade and the share price was at one stage more than 2.5% lower at R177.49, but it had made up all those losses by mid-morning. The share rose 0.27% to yet another 52-week high of R183.20. Glencore [JSE:GLN] was 1.44% firmer on another high of R40.08, but BHP Billiton [JSE:BIL] shed 0.57% to R217.85.

ArcelorMittal [JSE:ACL], which recently apportioned a 22% stake in the company valued at R2.3bn to black investors, employees and communities, gained 4.03% to reach a new 52-week high of R12.64. At one stage the share price was more than 6% higher.