JSE higher as banks and financials rebound on steady rand

The JSE recovered from a shaky opening on Monday to close higher as banks and financials rebounded on a steady rand, while private-sector credit data pointed to some recovery in lending in a subdued economy.

Trade was quiet, with turnover amounting to R11.8bn, half that of a normal trading day.

The rand traded in a tight range, firming to R13.1467 to the dollar in intraday trade from R13.1882 previously.

M3 money supply increased slightly to an annual 5.8% in June from May’s 5.7%, with growth in private sector credit extension accelerating to 5.7%, higher than the market’s forecast for an unchanged 4.5%.

“Today’s figures suggest that economic activity will probably pick up pace during the second half of the year,” Nedbank analysts said.

Global trade was subdued with the Dow opening slightly lower as the market eyed a number of central bank meetings this week.

The Bank of England is widely expected to hike the benchmark rate above 0.5% for the first time since early 2009. A rate hike is now 86% priced in which could trigger a lot of volatility if policy makers once again hold off, as they did back in May, Oanda analyst Craig Erlam says.

The US Federal Reserve and Bank of Japan will also hold meetings this week, although these may be less eventful, with neither expected to adjust policy.

The Fed has signaled two additional rate increases before the end of the year, but is not expected to raise rates again until September, Dow Jones Newswires reports.

Central banks have been confronted with diverging global growth, with eurozone GDP expected to be about 1.6% in the three months to end-June, well below the 4.1% recorded by the US, the newswire says.

After opening more than 2.5% lower, market heavyweight Naspers pared some of its losses in late trade, despite a stronger rand. Its share price has been under pressure of late amid shareholder criticism of its dual-voting structure, as well as the perceived excessive pay package of CEO Bob van Dijk. It closed 1.28% lower at R3,315.08.

The all share closed 0.26% higher at 57,313.10 points and the top 40 gained 0.2%. The gold index rose 2.53%, banks 1.36%, financials 0.98% and property 0.85%. The platinum index shed 0.58%.

Sasol lost 1.1% to R511.70, while Sibanye-Stillwater jumped 6.21% to R7.87.

Standard Bank was up 1.87% to R203.10 and FirstRand 1.34% to R67.90.

Massmart rose 3.8% to R117.50. The group, which is scheduled to release its results for the six months to end-June on August 23, said it expected to report its basic earnings per share (EPS) declined by between 40% and 50%. It said, however, sales had ticked up since May.

International property group Nepi Rockcastle rose 2.76% to R120.95.

After rising 2% during the course of the day, Spur closed flat at R25.51. It said earlier total franchised sales grew 1.3% to R7.1bn in the year to end-June. Sales at its flagship Spur Steak Ranches fell 2.8%, but strong growth was recorded at RocoMamas and The Hussar Grill.

Source: businesslive.co.za