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Weaker rand pushes JSE to new record

Oct 09 2017 12:55
David van Rooyen
JSE,jse


Company Data

GLENCORE PLC [JSE:GLN]

Last traded 64
Change 0
% Change 1
Cumulative volume 6006107
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

BHP BILLITON PLC [JSE:BIL]

Last traded 250
Change -1
% Change -1
Cumulative volume 1628572
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Sibanye Gold Limited [JSE:SGL]

Last traded 16
Change 0
% Change 0
Cumulative volume 12735210
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - The rand fell back to a near six-month low over the weekend, and that was just the push share prices on the JSE needed to reach a new record yet again on Monday.

By mid-morning all the major indices on the JSE were higher, with the All-share Index and Top 40 Index trading at new all-time highs. The All-share Index was 0.59% higher on a high of 57 572 points and the Top 40 Index gained 0.67% to a high of 51 352 points.

These indices were pushed higher by the Industrial index, which is also on an all-time high and gained 0.46%, and the Resources index which traded 1.33% higher on a 52-week high.

These two indices include most of the dual-listed shares which earn most of their income abroad or in foreign currencies, and therefore earn more in rand if the currency is weak.

The rand traded at R13.79 to the dollar, which is close to the weakest level in six months, by mid-morning on Monday.

The US Labour Department’s closely watched employment report showed non-farm payrolls fell by 33 000 in September as hurricanes Harvey and Irma left displaced workers temporarily unemployed and delayed hiring, but investors were more interested in the better-than-expected rise in average wages.

Average wages were up 0.5%, compared with a 0.3% increase estimated by economists polled by Thomson Reuters. The gain was the largest since December 2016, helping lift the dollar to a 12-week high.

It was, however, noticeable that most of the indices and share prices on the JSE started to move sideways after an initial sharp gain. Naspers [JSE:NPN], which gained more than 10% over the previous seven days, was only 0.31% higher on a new intra-day high of R3 174.10. British American Tobacco [JSE:BTI] traded 1.88% stronger at R869.60 and MTN was 1.17% higher at R122.60.

Sasol gained 1.99% to R392.67 after the company said it has shelved plans to sell 43 million shares to raise cash to fund its obligations and cost of the cancelled the Inzalo FundCo empowerment scheme. The plan is to repurchase the preferred ordinary shares issued for the scheme. The share gained 3.63% over the previous seven days.

Much attention was on the resources sector after news that Glencore [JSE:GLN] is to buy a 75% stake in Chevron’s oil refining and fuel service stations in SA and Botswana. The Swiss commodities company agreed to buy a controlling stake in Chevron’s assets in southern Africa for $973m from minority black shareholders. The assets include a 100 000 barrel-a-day refinery in Cape Town and more than 800 gas stations.

Analysts said that Glencore followed a different strategy to that of other commodity groups, which have focused on dividends and stock buybacks. Glencore prefers to use its cash to buy assets to which it can add value.

Glencore on Friday closed on a new 52-week high of R66.14 after gaining more than 7% over the past seven days, but investors preferred to take profits on Monday. The share price was 0.08% softer at R66.09 by mid-morning, but earlier traded as low as R65.50.

Anglo American [JSE:AGL] continued to set new 52-week highs and traded 0.52% higher on a new intra-day high of R265.53. BHP [JSE:BIL], which has recently lagged behind the other commodity giants, gained 1.14% to equal the 52-week high of R249.49.

BHP gained only 12.77% for the year to date, compared to Glencore which added 41.5% and Anglo which added 35.3% over the same period.

The Gold index gained 1.71% after the gold price rose 1.04% to $1 282.05 per ounce.

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equities  |  jse  |  markets

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