JSE opens firmer as banks rebound on easing of emerging-market jitters

The JSE opened firmer on Thursday after a decision by the Turkish central bank to hike interest rates lifted the pall hanging over emerging markets somewhat.

Trading was cautious on subdued company results released at the opening and ahead of the Reserve Bank interest-rate decision later in the afternoon, with rates expected to be kept on hold.

Following an emergency meeting, the Turkish central bank steeply raised its lending rate from 13.5% to 16.5%, with the rand steady at firmer levels of R12.41/$ from overnight trade.

The stronger rand benefited banks and retailers on the JSE, with miners marginally up. Platinum stocks continued to retreat.

Asian markets were mixed following a subdued close on the Dow. The Nikkei 225 lost 1.11% and the Hang Seng gained 0.3%.

Risk trade was further supported by the US Federal Reserve minutes for the May Fed meeting released on Wednesday, which was less hawkish than expected.

“It showed that the central bank was in no hurry to increase the pace of interest rate hikes,” analysts at Nedbank Corporate and Investment Banking said.

At 10am the all share was up 0.46% to 57,308 points and the top 40 added 0.57%. Banks rose 1.49%, the gold index 1.45%, food and drug retailers 1.05% and financials 0.61%.

Sasol rose 1.18% to R467.23.

British American Tobacco dropped 0.66% to R631.78.

FirstRand rose 1.54% to R61.43.

Life insurer and asset manager MMI slipped 1.81% to R19.53. The group said diluted core headline earnings for the nine months to end-March was down 5% on the prior period. Earnings growth has been hampered by weak growth in average assets under management and poor persistency in Metropolitan Retail.

Massmart plummeted 5.29% to R132.76. It reported sales growth of 0.8% for the first 19 weeks of the 2018 financial year.

Property group Capital & Counties dropped 0.06% to R48.27 in choppy trade. It announced a demerger on Thursday by splitting the company into two separately listed businesses based around its prime central-London estates. One will focus on Covent Garden and the other on Earls Court.

Tiger Brands dropped 2.37% to R341.01. The group said on Thursday that pretax profit from continuing operations fell 18% to R1.9bn in the six months to end-March.

Mediclinic dropped 3.71% to R109.41 after reporting annual revenue rose 4% to £2.8bn.

Famous Brands rose 0.68% to R103.50 after reporting headline earnings per share was down 8% for the year to end-February.