JSE poised for mixed start on Friday as Richemont reports results

SA stocks could open mixed on Friday as simmering trade tensions between the world’s largest economies keeps investor confidence in check.

A trade dispute between the US and China took a turn for the worse this week after China retaliated to higher tariffs and US President Donald Trump signed an executive order to ban Chinese telecommunications giant Huawei from the US market.

Meanwhile, the Wall Street Journal reported on Thursday that China’s commerce ministry said it was unaware that trade talks between the two countries would resume, contradicting US assurances.

“From where we’re standing, it seems as though a mutually beneficial, amicable resolution to the continuous trade dispute remains out of reach,” Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions, said on Friday.

Hong Kong’s Hang Seng index was 0.8% down on Friday and the Shanghai Composite slipped 1.5%. Korea’s Kospi was flat and Australia’s main benchmark gained 0.7%.

Tencent, which reported better-than-expected results this week, was 1.2% down in Hong Kong. That suggests a weak opening for major shareholder and JSE-heavyweight Naspers.

But JSE-listed BHP Group was 2.2% up in the Australian market.

Luxury goods company Richemont is due to report annual results on Friday, as is workforce manager Adcorp.

FNB Securities said last week Richemont was expected to report a 26% increase in full-year revenue.

No major data releases are expected in SA on Friday, while the EU will publish consumer inflation numbers.

The rand, which has strengthened this week on the back of a favourable election outcome for President Cyril Ramaphosa, was slightly weaker on Friday morning at R14.31/$, R18.30/£ and R15.99/€.

“The rally in the rand has brought some relief to the market, however its sustainability lies in the balance,” said Botes.

But the local currency could target levels as high as R13.80/$, she said.

This was “an opportunity that should be taken advantage of” given that the rand would probably come under pressure in the long term as SA’s structural woes come to the fore.

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