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Johannesbug - Share prices on the JSE were higher on Tuesday, despite the turmoil caused by President Jacob Zuma’s decision to recall Finance Minister Pravin Gordhan from an overseas roadshow for foreign investors.
The price movements were mainly driven by the value of the rand, as often happened in the past, and not so much by the economic uncertainties caused by Zuma’s actions.
These uncertainties were reflected in the value of the rand, which was hovering at around R13.00 to the dollar on Tuesday morning after it reached levels of R12.31 on Monday before Zuma’s actions became known.
READ: Rand tanks as Zuma's Gordhan move fuels reshuffle fears
A weaker rand means South African shares are cheaper for foreign investors, who mainly buy the dual-listed shares on the JSE which are not strongly linked to the South African economy, as they have business interests all over the world.
Global markets also steadied somewhat on Tuesday morning, which supported the dual-listed shares as they are also listed on stock markets in Europe.
Most of these stocks are part of the Resources and Industrial indices, which both made solid, although not spectacular, gains.
By mid-morning the Resources index was already 1.29% higher and the Industrial index was 0.82% up. The Financial index, which is more closely linked to the South African economy, traded 0.07% lower after dropping sharply on Monday.
The result was that the All-share index at mid-morning was already 0.77% higher at 52 123 points, while the Top 40 index, which includes most of the big dual-listed shares, gained 0.82% to 45 028 points.
The weaker rand is a welcome bonus for resources shares, which have been sharply down over the past month as the rand continued with its strong run. BHP Billiton [JSE:BIL] and Anglo American [JSE:AGL] both lost more than 16% over the past 30 days, and more than 5% over the past week.
BHP Billiton was however 1.99% stronger on Tuesday at R196.50, while Anglo American traded 1.13% firmer at R195.49. Glencore [JSE:GLN], which lost more than 8% last week due to the strong rand, at mid-morning was 2.12% stronger at R50.00.
Sasol [JSE:SOL], whose income is very closely linked to rand strength, gained 2.93% to R371.52 and Kumba [JSE:KIO] was 3.2% stronger at R197.12.
Among the industrial shares, Naspers [JSE:NPN] made a strong move and gained 2.66% to R2 295.50. The share price was supported by news that Tencent, the Chinese internet giant which represents most of Naspers’ income and market value, has signed a $4.65bn loan deal amid a flurry of fund-raising by China's internet giants.
Tencent, which had an original target of about $2bn for the loan, raised it from a dozen banks. Naspers owns 34% of Tencent.
The two listed companies in the Mondi stable both traded at new 52-week highs. Mondi plc [JSE:MNP] was 1.10% stronger on a high of R311.74 and Mondi Ltd [JSE:MND] gained 0.70% to R311.05.
Bidcorp’s share price did not respond much to the news that Brian Joffe will step down as executive chairperson of the foodservice group at the end of June to launch his own investment firm. Bidcorp [JSE:BID] was spun out of Bidvest [JSE:BVT] in a $5bn listing last year.
READ: Joffe to relinquish Bidcorp role to form new listed firm
Bidcorp lost only 0.24% to R266.60 and Bidvest traded 2.24% lower at R160.32.
Joffe, who is also Bidvest’s chairperson, will take on the role of non-executive chairperson of Bidcorp. It will be the first time he will not be part of the management of either company since founding the group in 1988.
In the financial sector, FirstRand [JSE:FSR] was the busiest share on the JSE and traded 1.64% softer at R49.76. Standard Bank [SBK], which is involved on the court case between the Gupta family and the minister of finance, lost only 0.25% to R53.26.
