JSE may follow Asian equities higher on Friday

Asian stocks rose on Friday morning, signalling a positive opening for the JSE, despite a mixed performance by US equities overnight.

American equities were largely flat on Thursday owing to renewed concerns about trade talks between the US and China. Leaders from the world’s two largest economies delayed a trade meeting until at least April, according to Bloomberg.

GT247.com said in a note on Friday morning the delay meant global market volatility would continue for some time.

Asian equities posted solid gains on Friday morning, with the Hang Seng index and Nikkei 225 both up 1%, and South Korean equities 0.7% firmer.

Tencent, Naspers’s flagship investment, was 0.9% higher in Hong Kong, although BHP Group was 1.1% down in Australia — suggesting a weak opening for the JSE’s fifth largest stock.

JSE-listed financial services group Investec is scheduled to provide an update to investors on Friday, before the company enters a closed period.

The rand was firmer on Friday morning, trading 0.3% higher versus the dollar at R14.49/$, 0.4% better against the pound at R19.19/£ and 0.2% up against the euro at R16.40/€.

Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions, said the rand was struggling to maintain its recovery.

“With the global market risk appetite running both hot and cold almost on a daily basis as geopolitical events continue to unfold, it’s hard to keep track of where the rand is headed and for how long it will remain there,” Botes said, adding, however, that the local currency was likely to weaken further.

The market was starting to believe that Moody’s might downgrade SA on March 29, she said. The shift in sentiment was probably attributable to the ruling party’s list of candidates for parliament, moves to nationalise the Reserve Bank, Eskom blackouts and “a public disregard of finance minister Tito Mboweni by deputy president David Mabuza”.

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