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Johannesburg - Share prices on the JSE were mostly lower on Monday morning, but the losses were to be expected in the light of market turmoil globally as the unlikely prospect of a Donald Trump presidency in the United States suddenly loomed large over the markets.
Wall Street closed lower on Friday and Asian and European markets were struggling on Monday morning, after Federal Bureau of Investigation director James Comey sent a letter to the US Congress informing it that the agency is again reviewing emails related to the private server Hillary Clinton used when she was secretary of state.
Markets have tended to see Clinton as a candidate who will largely maintain the status quo, while there is greater uncertainty over what a victory for Trump might mean for US foreign policy, international trade deals and domestic economy.
Clinton opened a recent lead over her unpredictable rival in national polls, but it had been narrowing even before the email controversy resurfaced. An ABC News/Washington Post poll released on Sunday showed Clinton with a statistically insignificant 1-point national lead.
Financial markets in South Africa were also facing political uncertainty this week as Finance Minister Pravin Gordhan was to appear in court on fraud charges, but the National Prosecuting Authority's (NPA's) decision to drop charges was good news for the rand.
The local currency at mid-morning was 1.59% stronger at R13.65, the highest
level since the beginning of October. By 11:42 the rand was trading at R13.63/$ - 1.46%
firmer than the previous close against the greenback.
READ: Rand rallies as NPA drops Gordhan charges
A strong rand is however bad news for the big dual-listed shares, as they are worth less in rands if the currency strengthens and also earn less in the local unit if it is strong.
The dual-listed shares in the industrial and resources sector were also pulled lower by weaker European markets, which traded down on the back of the Trump factor, lower oil prices and poor results from the financial sector.
The Industrial index was already 0.97% lower by mid-morning, while the Resources index lost 0.78%. Financial shares however benefited from the strong rand and the Financial index was at that stage 0.87% higher.
The result was that the All-share index lost 0.44% to 50 575 points, while the Top 40 index shed 0.63% to 44 029 points.
The major local news before NPA boss Shaun Abrahams announced the withdrawal of charges against Gordhan was the announcement that Whitey Basson will retire at the end of the year as chief executive of Shoprite. The share price rose sharply and gained 4.71% to trade at R200.
READ: Whitey Basson to retire as Shoprite CEO
Basson was instrumental in the group growing from a small eight-store retail chain to a R110bn international retail group which employs 140 000 people. He will remain a non-executive vice-chair to facilitate an “orderly leadership transition”.
Chief operating officer Pieter Engelbrecht, who has been with the company for 20 years, will take the reins in January next year.
READ: Meet the man who will fill Whitey Basson's shoes
Among the big dual-listed shares in the Industrial index, Naspers [JSE:NPN] traded 2.09% lower at R2 267.82 and British American Tobacco [JSE:BTI] lost 0.55% to R71.50. Richemont [JSE:CFR] was 2.60% softer at R87.87.
In the resources sector Anglo American [JSE:AGL] lost 0.42% to R184.34 and BHP Billiton [JSE:BIL] shed 0.25% to R206.23.
Sasol [JSE:SOL] lost 1.97% to R374.00 as oil prices extended their slide, driven by renewed oversupply concerns. The price, which was just above $48 per barrel for Brent crude, has surrendered most of the gains made in the first half of October.
The latest oil woes came after non-Opec producers failed to make any specific commitment to join the Organisation of Petroleum Exporting Countries in limiting output to support prices on Saturday.
FirstRand [JSE:FSR] was a star performer among the banks, gaining 3.74% to R47.73, and Standard Bank [JSE:SBK] was 2.82% higher at R143.00. Barclays Africa [JSE:BGA] traded 2.34% higher at R156.56.
Old Mutual [JSE:OML], which is also listed in London and reached a 52-week low on Friday, traded 0.75% down to yet another low of R33.14.
