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Markets WRAP: Rand closes at R14.78/$

2019-06-10 09:07

The rand strengthened by more than a percent on Monday and closed at R14.78/$, having opened at R14.90.

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Last Updated at 21:45
10 Jun 17:12

Rand closes at R14.78/$

The rand strengthened by more than a percent on Monday and closed at R14.78/$, having opened at R14.90.

Closing indicators from TreasuryONE:

USDZAR 14.7883

EURUSD 1.1314

EURZAR 16.7231

GBPUSD 1.2686

GBPZAR 18.7510

AUDZAR 10.2979

CADZAR 11.1394

CNYZAR 2.1320

ZARJPY 7.3356

CHFZAR 14.9287

R186 8.40%

US 10 Year 2.14%

JSE 0.58%

FTSE 0.59%

S&P 500 0.83%

10 Jun 17:09

Equity transaction to knock MultiChoice earnings

Entertainment company MultiChoice Group [JSE:MCG] is bullish about its trading profit for the financial year ended March 31, 2019 but the same cannot be said for its net earnings.

The group on Monday issued a trade statement indicating that core headline earnings per share for the period is expected to be between 8% (30c) and 12% (45c) higher than the previous year's earnings of 374c per share.

"Trading profit is expected to be between 9% (R0.6bn) and 13% (R0.8bn) higher than the prior year´s reported R6.3bn," the statement read.

The group attributes the improved financial performance on its subscriber growth and reduced losses in its "rest of Africa" business segment.

The group however expects losses per share of between 673c and 739c, compared to earnings of 332c per share reported in the previous year."Headline loss per share for the current period is expected to be between 724 cents and 800 cents lower than the prior year´s reported headline earnings per share of 410 cents," the statement read.

The group attributes this to having to account for allocating a 5% stake in Multichoice SA Holdings to Phuthuma Nathi Investments as part of the unbundling process.

MultiChoice had unbundled from internet group Naspers and listed on the JSE in February this year.

10 Jun 16:40

Stocks gain, bonds slide after Mexico trade relief

US stocks joined a global rally in equities after President Donald Trump suspended plans for tariffs on Mexico. Sovereign bonds fell across the board, along with gold and the yen, as demand for havens ebbed.

The S&P 500 Index advanced for a fifth straight session, led by chipmakers and auto companies.

Emerging-market shares headed to their biggest increase since January as Mexico’s peso strengthened the most in almost a year after the accord with the US late Friday. The dollar climbed, particularly versus the pound after weak economic data in the UK. The onshore yuan fell to its weakest level since November after China’s central bank governor hinted there was no line in the sand for the currency. Treasuries slumped.

10 Jun 16:24

Tongaat shares suspended to 'protect investors'

The board of Tongaat Hulett has requested the suspension of its listing on the Johannesburg Stock Exchange amid an investigation.

According to a shareholder notice issued on Monday afternoon, the company's listing on both the JSE and the London Stock Exchange has been suspended. This decision by the board comes following a delay in the publication of the company's financial results.

Shareholders were advised on May 31, 2019 that the financial results for March 31, 2018 cannot be relied upon and will be restated. This has had implications for the reliance of the interim results for the period ended September 30, 2018 and the full 12 months ended March 31, 2019.

"Owing to the board’s concern that there is insufficient information in the market to enable investors to make informed decisions, the board has voluntarily approached the JSE with a request for a suspension of the listing of the company’s securities.

"The JSE has granted this request, and accordingly the listing of the Company’s securities on the JSE has been suspended. The listing of the securities on the London Stock Exchange, on which the company has a secondary listing, has also been suspended," the notice read.

10 Jun 15:30

Murray & Roberts appoints new auditors

As part of the Independent Regulatory Board for Auditors mandatory audit firm rotation requirements, Murray & Roberts Ahas appointed PwC as its external auditor.

"The appointment of PwC as external auditor will be for the financial year ending 30 June 2020 and the current auditors, Deloitte, will complete the audit of the financial results for the financial year ending June 2019," the group said in a shareholder notice.

"PwC will be the appointed with effect from 28 August 2019, on which date the company is expecting to release its financial results for the year to June 2019.

"Shareholders will be asked to approve the appointment of PwC as external auditors for Murray & Roberts at the Company’s 2019 Annual General Meeting, scheduled on 28 November 2019."


10 Jun 14:08

Gold stocks' best JSE rally since 2008 ends abruptly

John Viljoen and Adelaide Changole, Bloomberg

An index of South African gold producers dropped the most in more than two months as investors’ reduced concern about trade tensions caused haven demand for bullion to ebb and a stronger rand reduced the stocks’ appeal.

The FTSE/JSE Africa Gold Index fell as much as 5.2%. It had advanced for 9 days, the longest winning streak since January 2008 before Monday’s session.

The sustained gains pushed the sub-sector gauge’s 14-day relative strength index to 81 on Friday, well above the level of 70 that signals technically “overbought” conditions.

“The weakness you are seeing is probably on the combination of a softer gold price, due to a trade deal being reached by the US and Mexico, and a stronger rand,” said Henre Herselman, a derivatives trader at Anchor Securities. Some money managers may be locking in profits, with some risk appetite returning, he said.

Gold fell the most in two months after President Donald Trump suspended his plans for tariffs on Mexico, snapping an eight-day winning streak and following the biggest weekly gain since 2016.

The rand strengthened for a second day, dulling the allure of South African producers whose costs are in the local currency, but who sell their output in dollars.

Harmony Gold fell 4.4% as of 13:10. AngloGold Ashanti dropped 4%, Gold Fields lost 3.6% and Sibanye Gold 3.2%.

An index of platinum producers dropped 4.6%, also snapping nine days of gains. Anglo American Platinum retreated 4.7%, Impala Platinum Holdings slipped 3.3% and Northam Platinum lost 2.4%.

10 Jun 12:44

Property group NEPI Rockcastle has been approved for a secondary listing on the A2X exchange, with its shares becoming available for trade from June 18.

NEPI will retain its listings on the JSE and Euronext Amsterdam. Its issued share capital will be unaffected by the listing.

A2X, which has been active since October 2017, is a licensed stock exchange which provides secondary listings for SA companies

NEPI CEO Alex Morar, in a statement on Monday, said the listing provides "current and potential shareholders an additional platform in which to trade our shares besides the JSE and Euronext Amsterdam.”

10 Jun 11:30

Gold seen hitting 6-year high as global markets outlook dims

Gold is finally gaining the traction needed to boost prices to a level not seen since 2013 as concern mounts over increased trade war tensions and the global growth outlook.

Bullion may touch $1 400 an ounce this year as investors hedge risk, according to Rhona O’Connell, head of market analysis for EMEA and Asia regions at INTL FCStone.

10 Jun 11:30

Steinhoff, Tongaat woes raise auditor scrutiny

Steinhoff's financial scandal and sugar maker Tongaat Hulett’s admission it may need to restate results is spurring South African auditors to weigh tougher measures for the profession.

While auditors are expected to reassure the public that the financial statements they have signed off are reliable, the standards used don’t require them to uncover wrongdoing. That may be set to change.

10 Jun 09:07

Rand claws back some gains in early trade 

The rand strengthened by 0.25% against the dollar in early trade on Monday morning, clawing back some of the losses of the past week. 

At 08:50 the local currency was at R14.91/$, after opening at R14.95 to the greenback. 

" [...] the main emerging market story this morning is that President Trump has suspended placing tariffs on Mexico indefinitely," said Andre Botha of TreasuryONE in a note. "This could account for some risk sentiment in favour of EM's as we have seen stock markets in Asia all in the green after the announcement." 

10 Jun 09:07

Asian stocks gain on Mexico relief

Cormac Mullen, Bloomberg

Asian stocks and US and European equity futures climbed Monday after President Donald Trump suspended plans for US tariffs on Mexico. Treasuries fell along with gold and the yen as demand for havens sank.

The Mexican peso jumped the most in almost a year after the US-Mexico agreement that was unveiled late Friday. Stocks climbed across the region, while futures on the S&P 500 Index and the Euro Stoxx 50 saw more modest gains.

The yen touched its low of the session after Governor Haruhiko Kuroda said the Bank of Japan can deliver more stimulus if necessary.

The dollar advanced against major peers, taking back some of its losses from Friday in the wake of a weak US payrolls report.

Investor attention on the trade front will likely return to China, with the “main progress” in US-China talks reliant on Presidents Donald Trump and Xi Jinping at the G-20 summit late this month, Treasury Secretary Steven Mnuchin said.

For their part, G-20 finance chiefs over the weekend warned about escalating risks to growth from trade and geopolitical tensions.

“The focus will now shift back to the G-20 and China,’’ strategists at TD Securities including Richard Kelly wrote in a note. “Despite the positive result with Mexico, the US-China trade dispute is a different creature, and tensions remain high.”

US stocks on Friday closed out their best week since November after the American jobs report for May showed employers added the fewest workers in three months and wage gains cooled - bolstering bets on easier monetary policy. Fed funds futures show a quarter-point cut almost fully priced in for July.

Elsewhere, oil extended gains above $54 a barrel after US drilling activity slowed and Saudi Arabia and Russia agreed to try and keep global markets in balance amid weakening demand.

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