JSE set for a spate of reporting on Thursday

The JSE will likely open mixed again on Thursday as global markets struggle for direction and reporting season gets into full swing in SA, with retail giants Woolworths and Massmart due to publish results.

US stocks closed higher overnight amid a lack of new headlines regarding the trade tussle between the world’s two biggest economies. “Stocks liked the quiet,” said National Australia Bank analyst Tapas Strickland.

On Wednesday, the UK “plunged closer to a constitutional crisis” after Prime Minister Boris Johnson effectively suspended parliament in the lead-up to the October 31 Brexit date, Strickland said. The move, which sparked a backlash, limits the amount of time legislators have to oppose a no-deal Brexit.

“To date, co-ordination between opposition parties and pro-remain Tory members of parliament has been lacking and centred on legislation, but this move could see them coalesce around a more radical form of action such as a no-confidence vote,” Strickland said.

Asian stocks were slightly lower on Thursday, with Hong Kong’s Hang Seng index down 0.4% at the lunch break and the Shanghai Composite down 0.1%. Japan’s Nikkei 225 edged 0.3% lower, while Korea’s Kospi lost 0.2%. Australia’s main benchmark was 0.1% down.

WeChat owner Tencent, which is 31% owned by Naspers, was 0.4% lower in Hong Kong, while JSE heavyweight BHP Group declined 0.2% in Australia.

A number of JSE-listed companies are due to report financial results on Thursday, including top-40 constituent Woolworths.

The Cape Town-based retailer warned earlier in August it had once again impaired the value of Australian chain David Jones, this time by a further A$437.4m (R4.5bn). That means the department-store chain is now worth less than half of what Woolworths paid for it.

Woolworths warned at the time that it made another basic loss in the 53 weeks to end-June because of the writedown. After adjusting to account for the extra week in the financial year, and stripping out the impairment and other one-offs, adjusted diluted headline earnings per share fell by up to 5%.

Struggling retailer Massmart is due to report interim results. In July, the group said it expected to report an operating loss of up to R30m for the 26 weeks ended June 2019 because of weak sales and double-digit growth in expenses.

Insurance group Santam is due to report half-year numbers, as is miner Sibanye-Stillwater.

Sibanye warned on Tuesday it would report a headline loss per share of 54c for the first half, versus headline earnings per share of 4c previously.

Education and recruitment group AdvTech is scheduled to report half-year numbers. It said recently headline earnings per share for the six months to end-June rose by between 25% and 35%.

Logistics provider OneLogix Group is expected to publish annual results.

Advanced Health is also due to report annual results. The company said on Tuesday it would report a net loss after tax of R38m, a 5% increase from the prior year.

Stats SA is scheduled to publish the producer price index (PPI) for July on Thursday morning.

“The moderation in the rand oil price should also be reflected in the PPI inflation dynamics for July, with a further easing likely in the coke and petroleum category,” Investec economists said last week.

“So far this year, the fuel price component has consistently been the largest contributor to the headline PPI outcomes.”

Stats SA will also publish data on trade and construction material prices.

Elsewhere, economic growth statistics are due from the US while economic and consumer confidence figures are due from the EU.

The rand was slightly weaker against the dollar on Thursday morning, with the local currency trading at R15.41/$. It strengthened against the pound, which lost ground after Johnson moved to suspend parliament. The rand was last traded at R18.81/£ and R17.09/€.

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