JSE set for mixed start on Monday after ANC victory at the polls

The JSE could get off to a mixed start on Monday after the ANC maintained its majority in South Africa’s elections, and as Asian markets edged lower.

Even though the ANC’s victory, with 57.5% of the vote, was less resounding than in previous elections, the margin is seen as wide enough to strengthen President Cyril Ramaphosa’s hand as he seeks to stamp out corruption and revive the economy.

“We view the result as providing a mandate for Ramaphosa to continue his reform and anticorruption drive, which is positive for SA investor confidence,” Anchor Group CEO Peter Armitage said in a note on Sunday.

“These results should also, in turn, see strong inflows into the South African equity market,” Armitage said.

Global stock markets were lower on Monday amid concerns about the ongoing trade dispute between the world’s two largest economies. The US raised tariffs on Chinese goods on Friday.

“The market’s focus will still be on any developing headlines about China’s possible retaliatory moves and the next steps for trade talks from here until Trump and Xi meet at the G20 meeting in late-June,” analysts at Singapore’s OCBC Bank said on Monday.

While markets in Hong Kong are closed for a holiday on Monday, China’s Shanghai composite index and Korea’s Kospi were both 1% down and Japan’s Nikkei 225 was 0.6% lower. Australia’s main benchmark was 0.4% down, with JSE-heavyweight BHP Group flat in that market.

A handful of financial results are due on the JSE on Monday, including from Vodacom Group, Astral Foods, Octodec Investments and Raubex.

Astral said in April its headline earnings per share in the six months to end-March fell by up to 55%.

“The reduction in profitability was mainly as a result of higher feed prices and production-related cost increases, exacerbated by lower selling prices for poultry products,” the poultry producer said at the time.

Road-builder Raubex warned that its full-year earnings would fall by up to 80%, partly because of the lack of construction projects in SA.

No major data releases are expected on Monday.

After strengthening on Friday, the rand was 0.4% weaker against the dollar on Monday morning.

The local currency was at R14.22/$, R18.50/£, and R15.97/€.

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