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Johannesburg - Financial and resources shares, which were the hardest hit by the uncertainty caused by political turmoil in South Africa, are slowly beginning to regain some of their recent losses.
These two indices were the big movers on the JSE for the third consecutive day as investors are beginning to pick up shares at lower levels, with the current lull in the spate of bad news that hit the market recently.
By mid-morning the Financial index was 0.59% higher, which means that it was in the black again over the past seven days, although only by 0.83%. The index was however still almost 3% softer over the previous 30 days and almost 5% over the past 90 days.
This means that financial shares have not recovered fully from the losses suffered when Pravin Gordhan was fired as minister of finance and South Africa’s credit rating was downgraded.
The Resources index was 0.76% higher at mid-morning, making it more than 3% higher over the past seven days but still 7% weaker over the past 30 days and almost 12% down over the past 90 days.
These recoveries also pushed the overall market higher and by mid-morning, the All-share index was 0.19% up at 51 696 points while the Top 40 index was 0.16% stronger at 45 576 points. The All-share index is however still more than 4% weaker over the past 30 days.
The JSE is also barely in the black for the year as Thursday’s level at mid-morning is only 826 points or less than 2% higher than the 50 760 points the market closed at on January 3.
Financial shares were also supported by the continued strength of the rand, which at mid-morning was R12.92 to the dollar. The local currency is boosted by a weaker dollar weighed down by disappointing US economic data and waning bets that President Donald Trump’s fiscal stimulus plans will pass the post. The dollar index slipped to its weakest level since October.
A recent batch of mixed economic data in the US, including softer-than-expected house price figures on Wednesday, have dampened the lure of the greenback and previous bets that the Federal Reserve will lift rates further this year.
Standard Bank [JSE:SBK] is currently the front runner among the banks, gaining 0.79% to R145.64, which means that it is already more than 4% higher over the past week. FirstRand [JSE:FSR] gained 0.92% to R48.23 and is now almost 2% higher than a week ago, with Barclays Africa [JSE:BGA] 0.63% stronger at R146.51. Barclays Africa gained more than 1% over the past week.
All the top banking shares are however still lower than 90 days ago, with Barclays Africa losing almost 12% and FirstRand 8% over that period.
Among the insurers Sanlam [JSE:SLM] gained 1.68% to trade at R66.65, and Old Mutual [JSE:OML] was 1.32% stronger a R33.52. Discovery [JSE:DSY] was one the busiest shares on the JSE but was only 0.19% firmer at R129.90.
Commodity giant Anglo American [JSE:AGL], which was the hardest hit by the panic following the release of the new Mining Charter, is also making a strong comeback on expectations that implementation of the controversial charter might be stopped in the courts.
Anglo’s share price, which gained more than 7% over the previous seven days, lifted 4.53% to R178.28, although still almost 25% lower than 90 days ago. As recently as February this year, the stock traded at a 52-week high of R235.18.
BHP [JSE:BIL] was above R200 a share again after it gained 1.56% to R200.73. Glencore [JSE:GLN] added 2.30% to R48.83.
Gold shares were however down due to the stronger rand and the lower gold price, and the Gold index lost 2.04%. AngloGold Ashanti [JSE:ANG], which lost more than 4% on Wednesday on news that it plans to retrench more than 8 000 workers in South Africa, shed 1.93% to R129.68.
Sibanye Gold [JSE:SGL], which lost almost 46% over the past month, lost 2.44% to R15.21.
