JSE poised for strong open on Monday

The JSE could make a strong start to the week thanks to optimism that the world’s two largest economies are closing in on a trade deal.

The Wall Street Journal reported on Sunday that the US and China were in the final stage of striking a deal. Beijing was offering to lower tariffs on certain US goods, while Washington was considering an end to the sanctions it imposed on certain Chinese products, the newspaper said.

The Shanghai Composite index was 3.2% up in late morning trade, while Hong Kong’s Hang Seng index was 1.4% up. Tokyo’s Nikkei 225 index was 1.1% higher.

JSE heavyweight Naspers looks set to get a boost from its main asset, Tencent, which was 1.8% up in Hong Kong.

BHP Group was 1.2% higher in Australia.

The busy reporting period continues on the JSE on Monday, with Bidvest, Hulamin, RCL Foods, Rolfes Holdings, Stadio Holdings and MAS Real Estate due to publish results.

RCL Foods said in February that it expected headline earnings per share (HEPS) for the six months to end-December to be down by between 28.9% and 23.5%.

The owner of Selati and Yum Yum brands, which is majority owned by Remgro, said the decline in profits was due to difficulties in its sugar and chicken businesses.

The rand, meanwhile, was slightly stronger on Monday morning after weakening significantly in the latter half of last week and at the weekend.

The rand was 0.37% stronger against the dollar at R14.18/$ in early trade. It was 0.15% firmer versus the pound, at R18.77/£, and 0.36% up on the euro, at R16.11/€.

“We might see some recovery of the rand on the back of positive sentiment towards the US-China trade negotiations, as [US President Donald] Trump gave some positive feedback over the weekend,” said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.

But Botes said any recovery would be “limited”.

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Source: businesslive.co.za