JSE likely to follow Wall Street higher on Thursday

The JSE is likely to follow Asian markets higher on Thursday, taking its cue from Wall Street where the S&P 500 closed nearly 1% higher on Wednesday.

The exchange-traded funds which track the S&P 500 on the JSE have enjoyed an eight trading day winning streak thanks to the US stock market rally and a weaker rand.

The CoreShares S&P 500 tracker has risen 4% from R34.07 on May 25 to close at R35.37 on Wednesday.

In Hong Kong, Tencent was 0.47% higher at H$427, indicating its 31%-owner Naspers is likely to enjoy its sixth trading day of gains on Thursday.

Naspers has rebounded 12% from R3,020.44 on May 30 to close at R3,385.56 on Wednesday.

Thursday is a quiet day on the JSE results front, but PPC may release its results for the year to end-March. It has not issued a trading statement as would be required if earnings differed by more than 20%.

In an operating update for the nine months to end-December issued in February, PPC said: “We have maintained our market leading position in SA despite the competitive trading environment. The rest of Africa portfolio continues to grow, delivering solid results ahead of the same period last year”.

“The lack of large infrastructure projects continues to hamper cement volume growth in SA. In the rest of Africa the robust growth in Rwanda has been maintained. Our Zimbabwe business has increased volumes significantly

compared with the same time last year. In the DRC, we have managed to ramp-up market share, although the market remains a significant challenge,” the operating update said.

Thursday is relatively busy on the economics front.

The Reserve Bank will release May’s foreign exchange reserves at 8am on Thursday, which are expected to have declined slightly from April’s $49.5bn.

Statistics SA is scheduled to release April’s manufacturing production and sales figures at 1pm, providing a first glimpse if SA’s economy is headed for a recovery in the second quarter from a disastrous first quarter.

The Absa sponsored manufacturing purchasing managers’ index (PMI) for April showed a four point jump to 50.9 points, indicating Stats SA’s figures should show a rebound from the annual 1.3% contraction reported in March.

Investec Bank economist Lara Hodes forecast a rebound to 1.6% annual growth in South African economic output in April from the same month in 2017.