JSE likely to take a breather on Monday

The JSE may take a breather on Monday after Friday’s 3.25% bounce.

Naspers will not get any direction from its 31%-owned associate Tencent because the Hong Kong stock exchange is closed for a national holiday.

Tencent’s 3.9% rise on Friday lifted Naspers 6.52% to R3,485, which in turn helped the top 40 rise 3.49% to 51,516 points.

In Frankfurt, Steinhoff International closed 6.41% lower at 7.3 euro cents on Friday after releasing results for the six months to end-March. In contrast, Steinhoff rose 6.6% to R1.29 on the JSE on Friday.

Steinhoff has still not released its interim results for the six months to end-September 2017, and is expected to sometime this week.

Tokyo’s Topix index was down 1.35%, and Sydney’s ASX 200 was down 0.2%, indicating the JSE may start the week on a bad note.

The rand was trading at R13.73 to the dollar, R16 to the euro and R18.10 to the pound at 7am.

The poor health of SA’s manufacturing sector will be in focus on Monday, with June’s purchasing managers index (PMI) scheduled for release at 11am and new vehicle sales at about 2pm.

The monthly poll of factory managers sponsored by Absa and compiled by Stellenbosch University’s Bureau for Economic Research (BER) has found the South African manufacturing sector hovering around a recovery this year.

A score under 50 points indicates the manufacturing sector is contracting, and over 50 indicates expansion. The monthly survey tends to foreshadow what Statistics SA’s manufacturing production and sales report will show about two months later.

The Absa PMI managed to edge above the neutral 50 point level in February for the first time since May 2017, but this turned out to be a false dawn because it fell back under 50 in March.

The economists’ consensus from a poll done by Trading Economics is that the manufacturing PMI will return to slightly above 50 in June from May’s 49.8 points.

New vehicle sales are expected to have risen to about 44,000 in June from 42,980 in May, according to Trading Economics.