SA’s flagship bourse could be in for more pain on Thursday as stock markets globally retreat on concerns that the US and China are now less likely to resolve a bruising trade dispute.
After US President Donald Trump imposed a ban on Shenzhen-based technology company Huawei, media reports emerged on Wednesday that similar sanctions on Chinese video surveillance group Hikvision are in the pipeline.
US stocks closed lower overnight, and Asian stocks were mostly lower on Thursday, with technology companies leading the declines.
Hong Kong’s Hang Seng Index was 1.3% down, the Shanghai Composite lost 0.8%, Japan’s Nikkei 225 fell 0.6% and Australia’s main benchmark edged 0.2% lower.
Chinese technology and gaming giant Tencent plunged 2.8%, suggesting a weak opening for major shareholder and Africa’s biggest public company, Naspers.
BHP Group, the third-largest constituent of the JSE’s top-40 index, was 1.7% down in Australia.
Meanwhile, reporting season is now in full swing on the JSE.
Fashion retailer TFG is due to report financial statements for the year to end-March on Thursday.
Private health-care group Mediclinic International will publish results for the year to end-March. The company said in April full-year revenue rose 2% but earnings before interest, taxes, depreciation and amortisation fell about 3.5%. Adjusted earnings per share were expected to fall to 27p, from 30p previously.
Tsogo Sun is also scheduled to publish results for the year to end-March. The hotel and gaming group said last week headline earnings per share fell between 17% and 21%. Adjusted headline earnings per share were between 3% and 7% lower, Tsogo said.
Related party Hospitality Property Fund will also report.
Afrimat is due to publish results for the year to end-February. The company said in April headline earnings per share rose between 20% and 30%.
eMedia Holdings will report numbers for the year to end-March. The group said last week headline earnings per share were expected to range between 13.5c and 14c, versus a 2.81c loss previously.
Hosken Consolidated Investments (HCI) will report financials for the year to end-March. It said on Wednesday headline earnings per share would decrease by between 13.8% and 3.8%.
Niveus Investments is expected to release results for the year to end-March. The company said on Wednesday it expected to report headline losses per share of between 20.6c and 27.6c for the year, from a headline profit per share of 70.1c previously. The group said its limited-payout and bingo operations were sold in November 2017 and were not included in the latest results.
Quantum Foods is scheduled to publish results for the six months to end-March. It said in April headline earnings per share fell between 42% and 48%.
Meanwhile, the SA Reserve Bank is due to announce its latest policy stance on Thursday afternoon, a day after a data release showed that SA’s headline consumer inflation rate unexpectedly decreased to 4.4% in April.
“We still believe that the subdued economy and relatively contained inflationary expectations should be enough to convince the monetary policy committee to keep interest rates steady on Thursday and throughout the year before they resume a mild hiking cycle with a 25-basis-point increase in March 2020,” Nedbank economists said on Wednesday.
“The repo rate is likely to remain on hold at 6.75% to account for the higher projected inflation over the forecast horizon,” said Investec economist Kamilla Kaplan.
Elsewhere, Germany is due to report economic growth numbers for the first quarter, the EU will publish manufacturing data, and the US will release jobless claims numbers, new home sales and manufacturing figures.
The rand was at R14.39/$, R18.19/£ and R16.04/€ on Thursday morning.