JSE may stumble after 10 day run

Thursday is a busy day on the JSE results and economics fronts.

Results are expected from short-term insurer Santam, computer hardware seller Mustek, and OneLogix.

The health of the banking sector will be in the spotlight with the release of July’s credit demand and money supply figures from the central bank, and Stats SA releases July’s producer inflation figures.

The JSE may take a breather on Thursday after 10 trading days of gains, judging from Asian markets.

Hong Kong’s Hang Seng index was down 0.6%, with Naspers’s dominant asset Tencent falling 1.1% to HK$356.80.

Mainland China’s Shanghai composite index was down 0.81%, but Australia’s ASX 200 index was up slightly, with BHP flat at A$33.84.

The rand was trading at R14.41 to the dollar, R16.86 to the euro and R18.78 to the pound at 6.20am.

Santam said on August 13 it expected to report on Thursday its interim headline earnings per share (HEPS) for the six months to end-June improved by up to 75%.

This jump earnings was “driven by significantly improved underwriting results compared to the six months ended June 2017. The net underwriting margin is expected to be slightly above the long-term target range of 4% to 8% of net earned premiums due to improved underwriting conditions during the reporting period,” the trading statement said.

Mustek said on August 23 it expected HEPS for the year to end-June to rise by up to 33%.

Mustek said its net asset value per share is expected to be between 15% and 16% higher than the previous financial year at between R13.44 and R13.56, indicating its share which last traded at R6.90 is values at less than half its book value.

Advanced Health said on August 27 it expected to report on Thursday its headline loss per share for the year to end-June improved to 14.12c from 21.74c in the prior year.

Its net loss is expected to improve to R36.25m from R48.18m.

OneLogix said on August 8 it expected to release its results for the year to end-May on Thursday. HEPS is expected to be be in the range of 9% to 19% higher than the prior year.

Basic earnings per share, which include profit from the sale of its 49% of DriveRisk and its sale and leaseback of Umlaas Road properties in KwaZulu-Natal, will increase by up to 87%.

The Reserve Bank is scheduled to release July’s credit demand and money supply figures at 8am on Thursday.

“The subdued economic growth backdrop, coupled with depressed business confidence readings and lacklustre investment rates have contributed to dampened corporate demand for credit,” Investec Bank economist Lara Hodes said in her weekly note.

“While household credit growth has been on an upward trajectory, it still remains weak in historical terms. Elevated unemployment rates, coupled with a higher tax burden have impeded consumers’ willingness and ability to spend. We therefore estimate a marginal lift in private sector credit extension to 5.9% from 5.8% in June.”

Statistics SA is scheduled to release July’s producer price index (PPI) at 11.30am.

Factory and farm gate inflation, as measured by the annual change in PPI, is expected to have accelerated to about 6% from June’s 5.9%.

PPI tends to move in the same direction, but swing more wildly, than the consumer price index (CPI) which rose to 5.1% in July from 4.6% in June.