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New cabinet breathes life into JSE

May 30 2019 18:37
Paul Chakaduka, Purple Group

The local equity market opened the day firmer as investors shook off the Ramaphosa cabinet announcement hangover. In what has become a trend or tradition, the president delayed his announcement as he was locked behind closed doors plastering together a cabinet that would live up to the expectations of the new dawn mantra he based his election campaign on. In this morning trade, the local bourse rallied in unison with international markets.

Africa’s largest diversified packaging group Nampak [JSE:NPK] released results first half results, this morning. The packaging giant has found the going tough in the first half sighting several headwinds which have hampered growth and repatriation of dividends to South Africa. These headwinds saw revenues decline by 4% and trading profit declined by 18%.

Inflation from the factory gate - Producer Price Inflation increased to 6.5% in the month of April up from 6.2%, this number was the highest recorded in 2019 and the highest since November of 2018.

Major drivers of this were petroleum and chemical prices which increased on the back of a weaker local currency and firmer global oil prices. This increase in inflation indicates that prices increased at a faster pace than had been anticipated.

Gains were recorded by SA Inc shares on the day with banks, retailers and local industrial counters bouncing to erase some of the loses recorded yesterday. Notable gains were chalked up by Cartrack [JSE:CTK] which closed the day up 12% to close at 1960c, Rebosis [JSE:REB] gained 6.49% to close at 82c. Astral Foods [JSE:ARL] gained 5.6% to end the day at 16763c.

Major losses were recorded by Omnia Holdings [JSE:OMN], the local chemicals company continues to come under pressure to close at 4660c easing 12.16% on the day. Blue Label Telecoms [JSE:BLU] was also softer on the day to close the day at 375c shedding 6.02%.

The JSE All-Share index closed 1.28% firmer while the JSE Top-40 index gained 1.35%. The resources index was firmer on the day gaining 0.59%. The industrials and financials indices gained 1.01% and 2.59% respectively.

At 17:00, palladium was 1.92% firmer to trade at $1369/Oz, platinum was also firmer recording gains of 0.4% to trade at $794.90/Oz, whilst gold was 0.11% firmer at $1282.55/Oz.

Brent crude was marginally softer on Thursday shedding $0.59 at the time of writing. A barrel of crude was changing hands at $67.28 per barrel. 

The local unit was firmer on the day as the market embraced the growth orientated cabinet that was announced by Ramaphosa last night.  The rand was trading at 14.71 to the US dollar, 16.36 to the euro and 18.50 to the pound sterling.

JSE winners and losers May 30

*Paul Chakaduka is a trading specialist at Purple Group

jse  |  markets  |  currencies  |  equities  |  rand
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