Publications
Partners
Johannesburg - Volatility remains the only constant in world markets as geopolitical factors and economic data continue to swing the pendulum from one end of the continuum to the next.
It was another topsy-turvy day on the local bourse as the market opened firmer on the back of stronger earnings numbers, only to wither away in the latter half of the trading session.
Pick n Pay stores [JSE:PIK] released a strong set of results today, giving credence to the turnaround strategy that management embarked on when Richard Brasher joined the group from Tesco in 2013.
At face value the company looks as if it had a pedestrian half-year; however, if we are to strip out the once-off item that relates to the severance packages paid out to staff, one can see that the retailer's trading profit is up 19.3% as opposed to 4.9%, as per their numbers.
The market received the numbers favourably, which spurred the retailer's share price to close at 7 500c, up 613c or 8.9% on the day.
Clicks [JSE:CLS] Group's grip in the retail healthcare sector continues, as the retailer produced yet another set of strong numbers. The group's ambitions to dominate the sector may be seen in its intentions to increase its domestic footprint by opening more stores in South Africa.
Margins within the group remain healthy, giving the retailer room to increase dividends paid out to shareholders by a staggering 16.5%. The share price is beginning to look a bit pricey now, trading at a forward PE ratio of 35.
The retailer's share price is up 55% year-on-year and has added 10% year-to-date.
As has been the case in the last week, rand hedges Reinet [JSE:RNI] and British American Tobacco [JSE:BTI] continued their slide lower today as the two JSE giants eased by 5.12% and 6.8% respectively.
Earnings out of Philip Morris [NYSE:PM] showed that the international tobacco maker anticipates smoking rates will decline globally.
Key markets for PM continue to show decline, and the market expects that most cigarette manufacturers would come under pressure from the Food and Drug Administration to produce cigarettes that have lower tar and addictive levels. This news out of PM can be attributed to the losses in BTI today.
Looking at some of the other movers and shakers on the day, Assore [JSE:ASR] gained 9.1%. Resilient [JSE:RES] recovered after the trouncing it received yesterday to close the day up 7.3%, and Fortress B [JSE:FFB] and Green Bay Properties [JSE:GRP] added some glitter to the REITs on the day, chalking up gains of 6.87% and 5.47% respectively.
The JSE Top-40 Index eased to close the day 0.58% lower to trade at 50 729 points, pulled lower by BTI [JSE:BTI], Reinet [JSE:RNI] and Naspers [JSE:NPN].
The broader JSE All-Share Index slid 0.32% to trade at 57 526 points. The Resource index was down 0.09%, while the Industrial and Financial Indices also closed the day lower by 0.79% and 0.66% respectively.
The rand was marginally softer today and was trading at R11.97/$ at 17:30 CAT. The local unit lost ground against the British pound and the euro to trade at 16.98 and 14.76 respectively.
Gold bullion eased on the day, as global tensions improved as more details around future talks between the USA and North Korea were released.
The precious metal made a session low of $1 341per ounce, having traded at $1 353/oz earlier in the session. The US dollar was firmer against most major currencies today, trading at a session low of 89.90 at the time of writing.
Platinum group metals were weaker today after yesterday’s strong run, as platinum eased to $936/oz at the time of writing, from a session high of $952/oz. Palladium followed suit as the metal declined to $1 031/oz, staying above the psychological $1 000/oz mark.
At the time of writing, Brent Crude was changing hands at $73.74, firmer from yesterday’s closing levels.
