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Surge in miners fails to lift JSE

May 28 2019 18:17
Musa Makoni, Purple Group

The JSE closed flat on Tuesday despite significant gains being recorded by the resources index.

Positive sentiment from China as well as a relatively bullish sentiment on metals such iron ore, played a significant factor in diversified miners advancing on the day. In Japan the Nikkei gained 0.37%, in mainland China the Shanghai Composite Index gained 0.96% while in Hong Kong the Hang Seng added 0.38%. Trading in Europe was relatively mixed with gains being recorded for the FTSE 100 as it reopened for the first time this week, while on other major regional counters stocks retreated.

Locally, significant weakness was recorded for the rand which slumped against the greenback. The slump was on the back of local political risk as the president is still to announce his cabinet, as well as a broader based sell-off in emerging market currencies. The rand fell to a session low of R14.74/$ and it looked set for more weakness when it was recorded trading 2.25% weaker at R14.72/$ at 17:00.

Lonmin [JSE:LON] recorded one of the day’s biggest gains as it was buoyed by news that a provisional vote by its shareholders had voted in favor of the takeover by Sibanye Stillwater [JSE:SGL]. Lonmin closed the day 11.86% firmer at R12.07, while Sibanye Stillwater advanced 9.67% to close at R12.36.

Diversified mining giant BHP Group [JSE:BHP] rose 3.21% to close at R341.95, while its sector peer Anglo American [JSE:AGL] gained 2.52% to close at R363.56. Oil and gas producer Sasol [JSE:SOL] advanced 3.62% to close at R369.00, while platinum miner Impala Platinum [JSE:IMP] gained 6.05% to close at R56.10.

The weaker rand saw rand hedges such as Sappi [JSE:SAP] gain 4.14% to close at R56.55, as well as Mondi [JSE:MNP] which closed at R312.06 after gaining 0.68%.

Rebosis Property Fund [JSE:REB] had another difficult trading session as it plummeted 22.47% to close at R0.69%. Telecoms provider Blue Label Telecoms [JSE:BLU] lost 8% to close at R3.91, while Telkom [JSE:TKG] dropped 5.78% to close at R84.80.

Financials retreated on the back of the weaker rand. Losses were recorded Old Mutual [JSE:OMU] which lost 4.51% to close at R20.34, FirstRand [JSE:FSR] which dropped 3.9% to close at R61.79, and Nedbank [JSE:NED] which weakened by 2.52% to close at R242.48.

The local bourse relinquished some its gains towards the close which saw the JSE All-Share index close unchanged while the blue-chip JSE Top-40 index only gained 0.05%. The resources index stood out as it rallied 2.86%. The financials and Industrials indices lost 2.03% and 0.555 respectively.

At 17:00, Platinum was down 1.31% to close at R800.25/Oz, palladium had lost 0.4% to trade at $1341.35/Oz, and gold was 0.5% weaker at $1278.71/Oz.

Brent crude traded relatively mixed as concerns over supply and the trade war continue to influence perception. The commodity was trading 0.52% weaker at $68.41/barrel just after the JSE close. 

JSE winners and losers May 28.
Musa Makoni is a trading specialist at Purple Group.

 

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