JSE opens higher on banks as rand hedges retreat

The JSE opened marginally higher on Thursday as a stronger rand supported banks and financials.

The rand firmed to a three-week best level of R13.0956 to the dollar as the dollar weakened after President Donald Trump and European commission president Jean-Claude Juncker agreed to reduce trade tensions.

The two agreed to launch a “new phase” in relations and work towards zero tariffs, the US president said. They also agreed to increase trade in services and agriculture, including greater US soya-bean exports to the EU, the BBC reported.

Rand hedges Anheuser-Busch InBev and Naspers were early casualties. The world’s largest brewer reported flat global sales and falling volumes in SA on Thursday morning. Its shares fell 4.83% to R1,333.30.

Naspers was lower amid general negative sentiment toward tech stocks after Facebook on Wednesday reported second-quarter sales and user growth that fell short of analysts’ projections.

Naspers dropped 0.79% to R3,283.99.

The Dow jumped at the close on Wednesday after the trade deal between the US and the EU was announced, closing 0.68% higher. However, Asian markets were softer on Thursday, with the Nikkei 225 slipping 0.12% and the Hang Seng down 0.68%.

Platinum and gold prices were higher despite the stronger rand and lower metal prices. Brent crude rose 0.7% to $74.64 a barrel.

The main risk event for the euro on Thursday will be the European Central Bank’s (ECB’s) monetary policy decision. The bank was widely expected to leave interest rates unchanged at 0.00%, FXTM analysts said.

ECB president Mario Draghi is likely to provide further clues on when interest rates are set to rise in 2019.

At 9.36am the all share was 0.49% up at 56,661.90 points and the top 40 gained 0.47%. Banks rose 1.65%, platinums 1.39%, financials 0.89%, the gold index 0.87% and general retailers 0.83%.

Anglo American slipped 1.23% to R289.70.

Nedbank rose 2.09% to R273 after the banking group said in a trading statement that headline earnings per share (HEPS) to end-June were expected to rise between 23% and 28%. The upbeat announcement buoyed the sector, with Absa rising 2.71% to R167.63 and Standard Bank up 1.54% to R197.73.

Steinhoff International rose 7.76% to R2.64.

Capital & Counties dropped 2.25% to R48.60. The property group announced on Wednesday that it was on track to split into two property companies.

Hammerson was 2.78% lower at R89.49.

Aspen Pharmacare rose 1.33% to R250.82.