JSE looks set to grow as world markets rally

The JSE looks set to continue accelerating and track global markets, with US markets closing higher overnight and Asian markets in the green on Tuesday morning.

The Hang Seng in Hong Kong was up slightly with a 0.41% gain, the Shanghai Composite in mainland China by 0.33% and Japan’s Nikkei by 0.18%.

The Hang Seng was close to a two-week peak in morning trade after recent hits, buoyed by the announcement that Hong Kong will lift quarantine rules for locally based airline crew from Saturday and travellers leaving the city no longer have to undergo temperature checks.

Automotive sales helped the Shanghai Composite as it rose close to a third year-on-year in a month. The Nikkei also reached a near two-week high amid speculation that inflation has peaked and growing US markets.

Tencent, which influences the JSE via Naspers, was flat.

Market moves have been erratic over the last few weeks amid fears that excessively high interest rates could tip the global economy into a recession.

Investors are betting that US inflation numbers for August, due on Tuesday, will show a declining trend. If so, the data would likely slow the pace of interest rate increases by the US Federal Reserve.

US inflation is likely to have decelerated to an annual rate of 8% in August, according to Bloomberg median estimate, from 8.5% in July. However, core US inflation, which excludes volatile energy and food, likely picked up 6.1% year-on-year from 5.9%.

“An absence of any real news has been enough to extend the recovery in risk sentiment ahead of US CPI tonight,” National Australia Bank analyst Tapas Strickland said in a note on Tuesday. “The inflation-has-peaked narrative got some more legs overnight with the New York Fed’s consumer inflation expectations falling sharply for the second month in a row.”

The JSE had a blockbuster session on Monday for the second trading day in a row, taking its cue from world markets.

The JSE all share index gained 1.55% to finish at 69,772 points — its highest close in two weeks. All the main indices closed positively.

Brent crude, gold and platinum were all down. Brent fell 0.19% to $93.82 a barrel. Gold was 0.15% lower at $1,721.49/oz. Platinum decelerated by 0.82% to $899.57.

The dollar slipped slightly against the rand, trading at $17.12.

Attacq, Libstar and WBHO will release results on Tuesday.

Mall of Africa owner Attacq expects its distribution income per share to rise 32%-36% to 61.8c-63.6c per share on improved trading conditions.

Libstar, the owner of Denny mushrooms, Lancewood dairy and Goldcrest brands, said on Monday it is working with police to investigate the cause of a fire that broke out at its Denny mushroom farm in KwaZulu-Natal last week.

Meanwhile, the food producer also announced on Monday that its CEO, Andries van Rensburg, will retire at the end of 2022 after co-founding the business in 2005. CFO Charl de Villiers, who joined Libstar in 2017, will take the helm of the R3.9bn company on January 1.

The share price of WBHO tumbled close to 6% on Monday after the construction companies flagged a wider-than-forecast annual loss.

The company said headline earnings loss per share, the primary measure of profit that strips out certain one-off items, would be 3,686c-3,717c in the year to end-June, swinging from headline earnings per share (Heps) of 619.5c a year before.

This will mark the first annual loss for the company, which was founded in 1970 and listed on the JSE in 1994.

In terms of economic data, Stats SA will publish the mining production and sales data for July at 11.30am, with improvements expected.

The Bureau of Economic Research (BER) at Stellenbosch University will release the latest FNB/BER building confidence index on Tuesday. Confidence in the building sector slipped in the second quarter from the four-year high registered in the first three months of 2022, weighed down by a plunge in the attitude of building material manufacturers.

The FNB/Bureau of Economic Research building confidence index registered a 6-point decline to 34 in the second quarter, but core building — which excludes building material manufacturing and hardware retail — gained four points to 35. The survey’s index can vary between 0, showing an extreme lack of confidence, and 100, indicating extreme confidence.

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