JSE opens weaker as Naspers retreats on poor Tencent showing

The JSE opened weaker on Wednesday as Naspers retreated on a weak performance from Tencent in Asian trade, while the rand remained above R14 to the dollar despite a further recovery in the Turkish lira.

The all share slipped below 57,000 points as the market eyed movements in the rand. On Tuesday, the local currency failed to break through R14/$ due to a resurgent dollar.

The rand was at R14.20 to the dollar in early morning trade on Wednesday, with the euro at $1.134. The Turkish lira firmed to just above six to the dollar from 7.20 in the currency’s rout earlier in the week.

“I am a tad confused by the overnight moves in the rand, especially given the steady trade in the lira after its recent gains,” said Umkhulu trader Adam Phillips.

He said it would certainly help the rand if the euro could bounce back above $1.14. “That must be main reason for present weakness,” he said.

Asian markets were weaker on Wednesday, pulled down by disappointing quarterly results from Tencent in Hong Kong trade, despite a higher close by the Dow, gaining 0.45%. Tencent traded more than 3% off. The company is also dealing with recent moves by the Chinese authorities to curb its exposure to certain games, its main source of revenue.

The Nikkei 225 slipped 0.68% and the Hang Seng 1.68%.

Naspers was immediately affected, trading 2.97% lower at R3,236 as it has a 31.2% interest in Tencent, which remains the main driver of its market value.

At 9.32am the all share was 1.16% lower at 56,938.20 points and the top 40 lost 1.3%. The gold index shed 3.79%, resources 1.76%, industrials 1.35% and platinums 0.8%.

Anglo American tumbled 3.74% to R287.28.

Sasol was 0.56% lower at R520.67.

Gold Fields shed 6.78% to R39. Bank of America Merrill Lynch questioned the group’s continued commitment to its South Deep mine, which earlier announced losses of R100m, despite numerous failed restructuring plans.

FirstRand dropped 0.95% to R64.71 and Standard Bank 0.34% to R188.60.

Brait shed 1.32% to R38.27.

Nepi Rockcastle slipped 0.58% to R122.44.

Curro dropped 0.54% to R31.28 after reporting its interims on Tuesday.