JSE may ignore US rally as Asian markets have

The US stock exchange rally on Monday, during which the S&P 500 gained 0.74% and the Nasdaq composite index 0.54%, failed to excite Asian markets on Tuesday morning.

A weaker rand amplified the S&P 500’s gain for South African investors who own it via the various JSE-listed exchange-traded funds which track it. Coreshares S&P 500 closed 1.12% higher at R35.10, Satrix S&P 500 Feeder was up 1.43% at R33.97 and Sygnia Itrix S&P 500 gained 1.2% to R35.39.

On Tuesday morning, the rand had regained some of the ground it had lost since Friday, and was trading at R12.63 to the dollar, R14.88 to the euro and R16.94 to the pound at 6.30am.

Hong Kong and South Korean markets were shut for Buddha’s Birthday.

Sydney’s ASX 200 was down 0.9%, with BHP down 1% to A$33.60 and South32 was down 0.64% to A$3.87.

BHP closed 1.95% higher at R303.28 while South32 fell 1.28% to R37.09 on the JSE on Monday.

Tuesday is a relatively busy day for JSE results.

Rhodes Food Group warned shareholders on March 20 that it expected to report on Tuesday that headline earnings per share (HEPS) for the six months to end-April fell as much as 47%.

This was partly due to it issuing 17-million shares to acquire Pakco, increasing is shares in issue by 7%.

Debt taken on to acquire Ma Baker saw its interest payments increase by about R19m.

African Equity Empowerment Investments (AEEI), a holding company 61% owned by Independent Newspaper proprietor Iqbal Surve’s Sekunjalo Investment Holdings, said on May 18 that it expected to report on Tuesday that its HEPS for the six months to end-February would be only about one-third to a half of the matching period’s restated 92.71c.

Although basic HEPS would plunge, “normalised” HEPS would increase more than fivefold from the matching period’s restated 5.62c.

AEEI said it had restated its 2017 interim results because while unbundling Ayo Technology Solutions into a separately listed company, “a revaluation of the fair value of investments which were considered materially undervalued was identified”.

“Accordingly, the reported earnings per the prior year interim results have increased by R310m from R138m to R449m due to the reason stated above,” AEEI said.

The trading statement included the caveat that these figures had not been reviewed or reported on by the company’s auditors.

Retailer Verimark said on April 12 that it expected to report on Tuesday HEPS for the year to end-February grew by up to 42.8%.

“Review of stock levels as well as improved ranging of more products within core retailers contributed to improved sales during the festive season and the second half of the financial year. Improved stock management assisted in meeting stock requirements,” Verimark said in its trading statement.

“Focus on reduction and containment of costs, helped to produce favourable results. This was achieved through a renewed cost benefit analysis, managing variable costs and elimination of wasteful expenditure, which led to cost increases being contained to below sales-growth levels and improved profitability.”

Statistics SA is scheduled to release March’s tourism and migration report at 9am.