JSE opens weaker on banks as rand tumbles past R13/$

The JSE opened lower on Friday as the rand weakened sharply through the R13/$-level, driving banking, retail and property stocks lower.

Mining and rand hedge shares were up on the softer local currency, which traded at R13.2450 to the dollar soon after the JSE’s opening.

Gold shares also rose on a slightly higher gold price at $1,298.70 an ounce.

The rand has been on the back foot since the weaker-than-expected GDP data for the first quarter were released earlier in the week, reflecting a contraction of 2.2%. It has lost more than 6% so far against the dollar in 2018.

However, Nedbank analyst Mehul Daya said it had nothing to do with politics or economics in SA. “What we are seeing is the unwinding of carry trade, with a dollar liquidity squeeze hitting all emerging markets, vulnerable or not.”

Sentiment on the JSE was decidedly risk-off towards local stocks, with Naspers also down more than 2% on weak trade in Asian markets. The Nikkei 225 shed 0.56% and the Hang Seng 1.89%.

In contrast, the Dow closed 0.38% up on Thursday, as defensive stocks rose in safe-haven trade.

The Group of Seven (G-7) is meeting on Friday and Saturday in Canada with tension high between the US and the other participants over trade, FxPro analyst said.

Brent crude lost 0.5% to $76.89 a barrel.

The euro was marginally weaker against the dollar at $1.179.

At 10.01am the all share was 0.90% lower at 57,863.40 points and the top 40 lost 1%. Banks lost 2.45%, general retailers 1.5%, financials 1.32%, industrials 1.29% and property 0.96%.

The gold index rose 1.78% and resources 0.41%.

BHP rose 0.72% to R308.55.

Kumba Iron Ore slipped 0.52% to R315.34.

Richemont added 1.19% to R122.04.

Bidvest dropped 3.21% to R196.28 after the group said “its trading profit continued to grow for the 10 months to end-April, albeit at a slower pace than that reported to December 2017”.

Sibanye-Stillwater rose 3.06% to R9.44 and Harmony 3.15% to R20.64.

FirstRand lost 2.99% to R59.71 and Standard Bank 2.34% to R201.56.

Sanlam was down 1.42% to R71.67, extending losses for the week to nearly 8%.

Steinhoff Africa Retail dropped 1.31% to R16.58.

Fortress B lost 2.23% to R16.24 in the property sector.

Naspers lost 2.71% to R3,329.13.