Asia points to a blue Monday for JSE

The JSE looks set to start the week on a bad note, judging from Asian markets.

Naspers’s 31%-owned associate Tencent was down 2.52% to HK$363.60, indicating the top 40’s largest constituent is going to drag the local bourse down on Monday.

The top 40’s second-largest constituent, BHP, was down 0.61% to A$34.20 in Sydney.

The rand was trading at R13.20 to the dollar, R15.39 to the euro and R17.30 to the pound at 6.30am.

Monday’s focus will be on the health of SA’s manufacturing sector, with two JSE-listed manufacturers scheduled to release results.

The share price of electronics products manufacturer Ellies rebounded 21% to 34c on Friday when it said it expected to report a return to profit for the year to end-April.

Ellies said it expected to report headline earnings per share (HEPS) of 7.89c from the prior year’s headline loss per share of 7.45c.

Aluminium products maker Hulamin warned shareholders on July 25 it expected to report its earnings for the six months to end-June were only about a fifth of those in the matching period.

Hulamin said it expected HEPS to drop to between 10c and 16c, from 56c in the matching period.

The Reserve Bank is scheduled to release June’s money supply and credit extension figures at 8am.

Investec Bank economist Lara Hodes forecast in her weekly note e-mailed on Friday that annual growth in private sector credit extension (PSCE) should remain muted at around 4.8% in June, marginally up on May’s 4.6%.

“Although lacklustre growth has been prevalent in both categories of borrowers (households and corporates), the main restraining influence on PSCE growth has been the corporate sector, which has slowed so far this quarter, primarily on the back of a marked decline in unsecured lending,” she wrote.

“The weak economic growth backdrop, along with persistently depressed business confidence and declining investment rates, have contributed to the dampened corporate demand for credit.”