Busy day for JSE watchers, while Asian markets offer mixed signals

Monday is a busy on the JSE results front, with Absa kicking off the bank interim results season.

Interim results are also expected from Royal Bafokeng Platinum (RBPlat), Merafe Resources and Interwaste.

Absa has not issued a trading statement, as would be required if the earnings for the first half of its 2018 financial year differed by more than 20% from the matching period in 2017.

“Absa is undoubtedly cheap on a multiple of nine and a dividend yield of 6%. But it has underperformed for some years,” Allan Gray portfolio manager Duncan Artus told the Financial Mail.

“We don’t get much confidence from its constant management changes. But it was given a big cheque in the divorce settlement from Barclays, so we have held on to a modest holding.”

Bloomberg Intelligence analysts Philip Richards and Edmond Christou said Absa “faces earnings headwinds from weak loan growth and a rising competitive threat in SA that overshadow lofty growth ambitions to double in size outside the country”.

Nedbank is scheduled to release its interim results on Tuesday, and Standard Bank on August 16.

RBPlat said on July 26 it expected to report on Monday its headline loss per share for the six months to end-June more than halved from the corresponding period’s 15.3c.

RBPlat said it would book a R25.9m impairment for a concentrator plant at Styldrift and another R20.5m “readiness costs” for its newly acquired concentrator plant at Maseve which will be commissioned in the second half of its financial year.

Merafe Resources warned shareholders on July 17 it expected to report on Monday its interim headline earnings per share (HEPS) fell by up to 17.5%.

Merafe said earnings suffered from lower ferrochrome prices and a stronger rand against the dollar.

Interwaste said on July 25 it expected to report interim HEPS grew by up to 45% during the six months to end-June.

“The increase in earnings compared with the prior period was primarily as a result of an increase in volumes from diversifying the customer base coupled with a strong focus on asset utilisation and efficiencies across the group. The reduction in net debt has also resulted in lower finance charges compared to the prior period,” Interwaste said in its trading statement.

The JSE received mixed signals from Asian markets ahead of its opening on Monday morning.

Mainland China’s Shanghai composite index was down 0.77%, but Hong Kong’s Hang Sang index was up 0.7%, helped by Naspers’s associate Tencent gaining 1.26% to HK$354.20.

In Sydney, BHP was up 2% to A$34.06, helping the ASX 200 index gain 0.5%.

The rand was trading at R13.34 to the dollar, R15.42 to the euro and R17.34 to the pound at 6.50am.