JSE shares move against global trends

Feb 03 2016 14:42
David van Rooyen

The new JSE logo. (Supplied)

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Last traded 932
Change -1
% Change 0
Cumulative volume 961012
Market cap 0

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


Last traded 271
Change 2
% Change 1
Cumulative volume 1067750
Market cap 0

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


Last traded 146
Change -1
% Change -1
Cumulative volume 1691165
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 - Share prices on the JSE went against the global trend on Wednesday and by midday the major indices were still clinging to their modest gains.

After a promising opening the indices moved mostly sideways with the more volatile resources and gold shares the best performers.

This was in sharp contrast with world markets which are still under pressure due to falling oil prices, which is regarded as symptom of the global economy.

Oil prices dropped for a third day on Wednesday, prompting investors to seek shelter in safe-haven assets which lifted bonds and gold to multi-month highs].

There are however increasing signs that investors on the JSE are beginning to see opportunities in oversold shares and are selectively picking shares which they regard as bargains.

By midday the All Share-index was 0.40% higher on 48 221 points and Top 40-index traded 0.45% stronger on 43 164 points. The financial index was only 0.35% stronger and industrials 019% but the resources index gained 1.59% and gold 2.02%.
Asian shares dropped sharply this morning with the MSCI's broadest index of Asia-Pacific shares outside Japan fell 2.1% led by a 2.7% fall in Hong Kong shares.

Japan's Nikkei lost 3.2%, wiping out almost all of its gains made after the Bank of Japan on Friday had announced it would introduce negative interest rates. Overnight, the US S&P 500 index fell 1.9%. The major European markets also started lower.

The reason for the slump is still the oil price. Brent crude futures, the world's oil benchmark, fell 0.7% to $32.48 per barrel, extending losses so far this week to more than 6%. US crude futures slipped 0.5%.

"There's no sign of improvement in the oil market. Demand is slowing in many emerging markets and in the US, which is the world's biggest consumer, oil inventories stood high," said Shuji Shirota, head of macro economic strategy at HSBC in Tokyo.

Hopes for an agreement to cut production dimmed this week as no deal has emerged and talks between Russia's energy minister and Venezuela's oil minister on Monday failed to produce any clear plan to reduce output.

Arcelor Mittal [JSE:ACL] and Kumba [JSE:KIO] are amongst the shares which are currently being bought by investors after losing more than 75% of their value.

Arcelor Mittal, which gained 85.8% over the past 30 days and 16.4% over the past seven days, traded another 7.62% higher on R6.64. The share price turned around on the news that the government will implement import tariffs to protect South African steel producers against cheap imports from China. The share is however still 76.7% lower than a year ago.

Kumba, which announced plans recently to dismiss 45% of its workforce as part of a restructuring programme to weather the current low iron price, traded another 5.95% stronger on R39.74. The share price, which is still 83.8% lower for the year, gained an amazing 28.8% over the previous seven days.

Even Anglo American [JSE:AGL] show signs of a recovery after the company said it will dispose of two thirds of its assets, although the share is still very volatile. It traded 3.85% higher on R60.20 and was before trading started already almost 7% higher over the previous seven days.

Anglo American was last year the worst performing share on the London Stack Exchange and is in danger of being kicked out of the FTSE 100-index because of the sharp drop in its market value.

The share’s market capitalisation in London is now only 3.9 billion pounds compared to 31 billion in 2011. The share price is now 70.6% lower than a year ago.

There was a lot of attention on the cell phone companies with Vodacom [JSE:VOD] gaining to 2.97% to R149.34 after it announced robust results for the third quarter of its financial year. In the three months ended December 31 2015, the telecommunications group reported normalised group revenue up by 7.6% to R21.7bn on the back of strong demand for data.

Group data revenue rose by 27.5% to R5.5bn, representing 32% of service revenue, it said. The customer base increased by 6.8% to 65.2 million, with data customers up by 14.5% to 30.3 million.

Its rival MTN [JSE:MTN], which lost more than 9% of its value over the previous two days, traded 0.65% stronger on R126.78. MTN is 30% lower than three months ago, when the operator’s troubles in Nigeria started.

British American Tobacco [JSE:BTI], the second biggest share on the JSE, helped to keep the industrial index in the black by setting yet another record. By midday on Wednesday it was 0.98% higher on a new high of R897.45. AB Inbev, the biggest share on the JSE which also traded at a new high earlier the week, lost 0.54% to R2 027.00.

The banking shares made modest gains. Standard Bank was 0.77% higher on R105.61 and FirstRand [JSE:FSR] gained 0.69% to R42.19.

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equities  |  jse  |  markets



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