JSE looks set for subdued day ahead of SA GDP figures

Data on the health of SA’s economy, as well as further concerns about the future of the US-China trade war, look set to weigh on the JSE on Tuesday morning, though a series of corporate releases could give the market direction.

GDP data for the second quarter at 11.30am are expected to confirm that SA has avoided a recession in the first half of 2019, with the consensus among economists that the economy expanded 2.5% when compared with the first three months of the year.

International sentiment remains fragile, with few signs that the US-China trade war is close to resolution. China on Monday lodged a dispute with the US at the World Trade Organization (WTO). It has also levied a 5% tariff on US crude oil imports.

Reports suggest the two sides are struggling to agree on a timetable for further talks.

“If they’re struggling to decide simple itinerary, expectations for anything tangible to arise from the trade talks are looking incredibly dim at this point,” said Vanguard Markets managing partner Stephen Innes in a note.

Asian markets were subdued on Tuesday, with Japan’s Nikkei down 0.41%, while most other bourses were little changed.

Gold had fallen 0.26% to $1.525.13/oz at 6.15am, while platinum was up 0.13% to $932.26. Brent crude was flat at $58.62 a barrel, while the rand had weakened 0.13% to R15.2727/$.

There may be a flurry of activity later as US markets react to developments over the weekend, having been closed on Monday for the Labor Day public holiday.

The local corporate calendar is busy, with Cashbuild expected to report revenue growth of about 4% for the year to end-June, having added new stores and had a 53-week financial year.

Wilson Bayly Holmes-Ovcon (WBHO) is expected to report that headline earnings per share (HEPS) fell 30%-40% in the year to end-June, with results hit by losses on a roads project in Australia. WBHO has said previously technical specifications of the project had been misinterpreted, and the amount of physical work required had been underestimated.

DRD Gold is expected to report 11% growth in revenue for the year to end-June, with a higher gold price in rand offsetting a 4% drop in sales volumes.

Anchor Capital is expected to report a 158% surge in interim HEPS to end-June later, as it bounces back from a goodwill impairment in the prior period, and benefits from a one-off R70.4m termination fee related to its investment management agreement with Astoria.

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