JSE could benefit from stimulus efforts on Friday

The JSE could take its lead from firmer Asian markets on Friday morning, as global central banks move to inject liquidity into a market beset by deep concern over the economic implications of the coronavirus outbreak.

The Reserve Bank surprised the market on Thursday by cutting interest rates by 100 basis points, while the Bank of England also cut rates, even as the US Federal Reserve said it was working on a new stimulus package.

“The shoulder-launched artillery barrage from the world’s central banks and government treasuries seems to have stopped the rot sweeping the global economy for now,” said Oanda analyst Jeffrey Halley in a note.

“Markets enjoyed a relatively quiet, by recent standards, overnight session, with equities stabilising in particular,” Halley said.

In morning trade on Friday the Shanghai Composite was up 0.47% and the Hang Seng 2.81%.

Tencent, which influences the JSE via major shareholder Naspers, had gained 2.86%.

Gold was up 0.8% to $1,482.80/oz while platinum had firmed 3.89% to $609.25. Brent crude was up 4.35% to $29.34 a barrel.

The rand was 0.4% firmer at $17.35/$, but has still lost about 5% over the past week.

There are no major local economic releases on Friday and focus is instead on the coronavirus outbreak and related statistics

While no deaths as a result of the Covid-19 virus have yet been reported in SA, the rapidly escalating number of confirmed cases is a key concern, and is already adding pressure to the health-care system, said Peregrine Treasury Solutions treasury partner Bianca Botes in a note.

In corporate news, Grand Parade Investments is expected to report later that profits rose in its half year to end-December, with the group recently moving to exit loss-making investments.

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