JSE likely to follow Asian markets slightly lower on Tuesday

The JSE is likely to follow Asian markets slightly lower on Tuesday, as attention shifts to the US Federal Reserve’s mid-week meeting.

Hong Kong’s Hang Seng Index was 0.3% lower at the lunch break on Tuesday, with Tencent 0.5% down. That points to a softer opening for Naspers, which owns 31% of the Chinese technology giant.

Tencent’s strong recovery over the past six months, which has aided the JSE, is partly due to waning uncertainty, local money manager Vestact said in a note to clients.

The group had “found a way to fit in” with the Chinese government’s conservative views by imposing age limits on its games, among other measures.

At the National People’s Congress last week, Chinese legislators dropped language that would have invalidated the so-called “variable-interest entity” structures used by Chinese technology giants, including Tencent and Alibaba, to list their shares in Hong Kong and the US, Vestact said.

Meanwhile, Japan’s Nikkei 225 index was 0.1% lower on Tuesday, while the main Australian benchmark was flat. BHP Group, a JSE heavyweight, was 1.7% higher in that market.

On the JSE, a handful of small-caps are due to report financial results on Tuesday, including Sasfin Holdings, Alaris Holdings and Hulamin.

Sasfin said earlier in March its headline earnings per share in the six months ended December had increased by up to 61.7%.

Hulamin said on Monday its headline earnings per share in the year ended December had declined by 4%. That was worse than an earlier estimate, leading to a 1.9% fall in its shares on Monday.

The rand was mixed on Tuesday morning, trading 0.05% stronger against the US dollar, at R14.43/$. Versus the pound, it was 0.18% weaker at R19.16/£ and against the euro it was 0.06% down at R16.37/€.

The US Federal Reserve is expected to keep interest rates on hold for the time being as it meets on Tuesday and Wednesday.

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