Ceasefire in US-China trade war may boost JSE

The Shanghai composite index surged 3.3% on Monday morning on the news that US President Donald Trump delayed his threatened tariffs on $200bn of Chinese goods, which were to take effect this week.

Naspers’s dominant asset Tencent, however, rose only 0.23% to HK$344.80, with Hong Kong stocks generally less euphoric than those in mainland China.

In Sydney, the JSE top 40’s second largest-constituent, BHP, was up 0.81% to A$38.

A busy week for company results kicks off on Monday with the top 40’s fifth-largest constituent, Sasol, UK shopping mall owner Hammerson and local shopping mall owner Liberty Two Degrees.

Other companies scheduled to report on Monday include construction group Aveng, Super Group, Tower Properties and Accentuate.

Sasol said in a trading update on February 8 that it expected headline earnings per share (HEPS) to have increased about 32%, while basic earnings per share more than doubled.

The synthetic fuel producer said it benefited from higher oil prices and a weaker rand against the dollar.

But Sasol’s trading update included the bad news that the estimated cost of completing its Lake Charles project in Louisiana had increased from $11.1bn to about $117bn. 

Excessive rainfall, high absenteeism, and “incomplete engineering work not timeously identified” were some of the reasons Sasol listed for its latest cost overrun in the US.

Aveng — which is among the JSE-listed construction groups whose woes from hefty fines for colluding on building stadiums for the 2010 soccer World Cup were compounded by disastrous projects taken on in a drive to expand outside of SA —  is also scheduled to release interim results on Monday.

Aveng’s share price has fallen from more than R45 before 2010 to last trade at 3c.

Aveng said on February 21 that its headline loss for the six months to end-December was expected to have about doubled from the R347m in the first half of its 2018 financial year. 

But its loss per share will be less severe thanks to the dilution caused by its shares in issue more than tripling following a rights issue and equity-for-debt deal.

The rand was relatively unchanged from Friday’s prices, trading at R13.96/$, R15.84/€, and R18.25/£ at 7am.

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