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Cape Town - The JSE managed to close in the green on Friday, and end the slide seen over the last week.
On Friday, traders were poised for announcements from S&P Global Ratings regarding the status of South African domestic debt. The ratings agency kept the country's long term foreign currency rating at BB+ with a negative outlook. The local currency rating remains at BBB- with a negative outlook.
FULL S&P STATEMENT: SA survives ratings downgrade
South Africa’s sovereign credit status is still under review by Moody’s – following on from the downgrades presented in April.
S&P's announcement, minutes before the markets closed in Johannesburg, had no impact on the Rand, with the unit closing the trading session on Friday at R12.80 to the greenback, following dollar weakness after lower than expected jobs data was released from the United States.
The JSE all share index closed 0.09% higher, followed by the blue-chip Top40 which edged 0.08% higher. The positive move was led by Financials gaining +0.96%, whilst gold miners dropped -1.49%, resources -0.77% and Industrials closed flat.
Barclays Africa [JSE:BGA] closed the trading session at R147.14, a gain of 3.79%. Barclays PLC has sold down it’s holding to an effective 15% shareholding in Barclays Africa Group through a successful placement of 33,7% of the issued share capital worth R37.7bn, one of the largest bookbuilds yet seen in South Africa. The PIC now own as large a stake in BGA as Barclays Plc.
The result of this deal, according to Mark N Ingham, an independent analyst on behalf of EasyEquities, “concludes a questionable twelve-year Barclays PLC/ABSA business relationship and ABSA can now plough its own furrow”.
Barclays PLC is contributing £765m toward separation costs of which £515m is in recognition of the investments required in technology, rebranding and related projects, £55m for separation related expenses, and £195m to terminate the existing service level agreement between Barclays PLC and Barclays Africa Group relating to ex-South Africa operations acquired in 2013.
“Barclays Africa has lagged it peers in share price performance for some years, as the table below illustrates” said Ingham.
In US markets, the dollar weakened significantly after posting weaker than expected non-farm jobs growth numbers. Following a strong month in April, when the jobless rate dropped to 4.4% - the lowest level in more than a decade - economists expected payrolls to increase by 185k in May and the unemployment rate to remain steady. Hourly wages are anticipated to rise by 0.2%, bringing the year-on-year increase to 2.6%. Today's report indicated that jobs only increased by 138k in May, missing estimates by 47k.
The numbers still appear positive, and will be among the last pieces of critical data Fed officials will analyse in detail before meeting later this month.
Crude oil prices fell to $49.73/bbl amid fears that the US withdrawal from the Paris accord will trigger more American drilling. The US oil industry exported a record 1.3m barrels of crude per day onto the world market last week - half million barrels less than the cuts OPEC and Russia agreed to make to daily production.
*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.
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