Johannesburg - The JSE took a breather from its record breaking run on Wednesday, as the rand strengthened considerably after the peaceful political transition in neighbouring Zimbabwe.
With the rand trading at R13.89 to the dollar, most of the dual-listed shares on the JSE, which earn most of their income in foreign currencies, were moderately lower by mid-morning.
Naspers [JSE:NPN], the driving force of the past few days, was again trading below R4 000 a share after Tencent traded lower after its record-breaking run of the past few days.
The Industrial index was the biggest loser, dropping 0.84% as not only Naspers but some of the other big dual-listed shares were also lower due to the stronger rand.
As a result the All-share index was 0.45% softer at mid-morning at 60 934 points, while the Top 40 index lost 0.63%. The Financial index received some support from the stronger rand and gained 0.04%.
The surprise was that the Resources index was only 0.04% lower by mid-morning, despite the strong rand. The big commodity conglomerates all lost ground, but the Resources index received a boost from a strong run from Impala Platinum [JSE:IMP], which gained more than 8% in early trade, and continued growth from Kumba [JSE:KIO].
At mid-morning the rand was already more than 1% stronger on the good news from Zimbabwe, but analysts warned that the currency's woes are not over yet. Investors are still nervous ahead of Standard & Poor’s and Moody’s review of South Africa's credit ratings on Friday, which will have a major influence on the economy.
According to Reuters survey among 25 top economists, 13 of them expect the rating will be lowered while 23 expect no change at this stage. Some analysts expect the rating agencies might postpone a downgrade until after the ANC congress later this month and the budget early next year.
The rand was also supported by the latest South African inflation figures, which will influence the Reserve Bank’s interest rate decision tomorrow. South Africa’s headline consumer inflation slowed to 4.8% year-on-year in October, in line with market expectations, from 5.1% in September.
Among the top industrial shares Naspers lost 2.93% to trade at R3 970.02 after Tencent, the Chinese internet giant of which Naspers owns 34.4%, lost 0.74% to HK$426.80 on the Hong Kong Stock Exchange. Tencent on Tuesday became the first Chinese internet company with a market value exceeding $500bn, and investors saw that as an opportunity to take profits.
British American Tobacco [JSE:BTI] was 0.75% softer at R930.78 and Richemont [JSE:CFR] dropped 0.52% to R123.66.
The big three commodity conglomerates all traded lower. Anglo American [JSE:AGL], usually the most volatile of the three, traded 1.22% softer at R268.64. BHP [JSE:BIL] was 0.27% softer at R257.52 and Glencore [JSE:GLN] shed 0.24% to R67.10.
The star in the resources sector was Impala Platinum [JSE:IMP], which at mid-morning was 5.57% higher at R40.77 after gaining more than 8% in early trade to reach R42.06. Investors responded positively to the news that Mark Munroe, a highly respected professional in the platinum industry, will join Impala to take control of the group’s troubled Rustenburg operations.
Impala’s share price moved strongly over the past 30 days, despite shocking results earlier this month, and before Wednesday’s trade was already 20.69% higher over the past 30 days. Kumba [JSE:KIO] traded 2.27% higher on a new 52-week high of R323.71.
Retail shares are still in demand and Mr Price’s [JSE:MRP] strong run continued on Wednesday. The share traded 4.67% higher on a new 52-week high of R210.85, after being as low as R170.89 as recently as October 25 – a gain of 23.5%.
Banking shares were among the busiest shares on Wednesday. FirstRand [JSE:FSR] traded 0.18% higher at R55.56, Nedbank [JSE:NED] was 0.84% stronger at R212.75 and Barclays Africa [JSE:BGA] jumped 1.83% to R152.75.
Capitec [JSE:CPI], which traded above R1 000 for the first time on Wednesday, fell victim to profit-taking and lost 0.15% to R992.42.