JSE could open higher on Friday as Steinhoff faces investors

The JSE all-share index could open higher on Friday amid renewed optimism that the US and China may still resolve a protracted trade spat, while embattled retailer Steinhoff International will face shareholders at its annual general meeting.

US stocks closed higher overnight and Asian markets followed suit on Friday as risk sentiment improved on trade developments.

China’s commerce ministry said on Thursday the country was in favour of heading back to the negotiating table in an effort to remove tariffs. Chinese representatives also remain open to a previously planned face-to-face meeting in September. US President Donald Trump said later that trade talks would go ahead.

Markets were expected to rally on Friday, “but gains are likely to be capped as we approach month-end”, analysts at OCBC Bank in Singapore said in a note.

The first set of new tariffs are expected to be implemented over the weekend, “and unless the US and China can find a resolution within the next 48 hours, it is likely the new tariffs will weigh on markets on Monday”, the bank said.

Hong Kong’s Hang Seng index was 0.7% up at the lunch break on Friday amid a crackdown on pro-democracy protests in the city as activists were arrested. The Shanghai Composite rose 0.2%, Japan’s Nikkei 225 rallied 1.4%, and Korea’s Kospi surged 1.9%. Australia’s main benchmark advanced 1.6%.

Chinese internet and gaming giant Tencent, which influences the direction of the JSE via major shareholder Naspers, rose 1.8% in Hong Kong. JSE-heavyweight BHP Group added 1.8% in Australia.

Meanwhile, Steinhoff is due to face investors at its annual meeting in Amsterdam on Friday. The fraud-accused retailer has been battling for its survival since former CEO Markus Jooste resigned in late 2017 as the group flagged “accounting irregularities”.

Steinhoff said on Thursday it would consider hiving off its best operations. “We must provide our strongest-performing businesses with the opportunity to perform to their full potential and ensure that Steinhoff’s shareholding is not a hindrance to their growth,” the group said.

Struggling construction firm Group Five is expected to publish its business-rescue plan.

Meanwhile, African Rainbow Minerals is due to report financial results for the year to end-June. The company said recently headline earnings per share rose by between 2% and 10% in the year.

Tower Property Fund is also expected to report full-year numbers.

The SA Reserve Bank is scheduled to provide figures on international reserves and central government debt, while the SA Revenue Service will release trade statistics.

Elsewhere, Europe is due to publish consumer inflation and unemployment data, and the US is expected to release real personal income numbers.

The rand was trading at R15.34/$, R18.68/£ and R16.94/€ on Friday morning.

“We are keeping an eye on Argentina and its negotiations with the International Monetary Fund and bondholders to extend maturities, as the country struggles to meet ongoing debt obligations,” said Bianca Botes, treasury partner at Peregrine Treasury Solutions.

“The situation is likely to add pressure to the already troubled peso and subsequently drag emerging markets weaker as a whole.”

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