JSE set to start off week to lower and flat Asian markets
The JSE will open the first full week of September to flat and lower Asian markets in a busy week in domestic economic data.
The Hang Seng in Hong Kong was down 1.28% as worries continue over Covid-19 lockdowns in some of China’s industrial hubs and most populous cities as the country holds firm on its zero-Covid-19 policy.
“For as long as the policy exists, any stimulus measures are unlikely to gain traction, amid a challenging time for the Chinese property market and the economy in general,” National Australia Bank analyst Tapas Strickland said in a note on Monday.
The Shanghai composite in China was up 0.10% despite Caixin China general services PMI falling to a three-month low of 53 in August, because of the latest of coronavirus infections and the recent historic drought causing energy shortages.
Tencent, which influences the JSE via Naspers, dropped 3.10% on the back of concerns about its disinvestment strategy. The Financial Times reported on Friday that the Shenzhen-based internet giant and owner of the popular messaging app WeChat plans to divest about 15% of its $88bn listed equity portfolio, according to two people familiar with the matter.
Japan’s Nikkei was flat, down 0.06%. It continues to track lower US markets that remained down as the latest US jobs data released on Friday did not allay fears about further interest rate hikes. Investors are also concerned about Japan’s service sector contracting in August for the first time since March.
The JSE all share gained 2% to 67,378 points on Friday, halting a five-day slide that had pushed the benchmark index to its lowest level since early July. The top 40 index advanced 2.25%.
Gold was flat at $1,711.88/oz. The prices of platinum and Brent crude rose by 0.55% and 3.10% to $838.50 and $95.01 a barrel, respectively.
The dollar gained 0.22% against the rand as it was trading at R17.35/$.
In terms of economic data, the S&P Global SA purchasing managers index (PMI) is forecast to rise for the fifth consecutive month in August to 53.4. The S&P Global SA PMI tracks business trends across the private sector, including mining, manufacturing, services, construction and retail, based on data collected from a representative panel of about 400 companies.
But all eyes will be on the latest release of SA’s GDP figures by Stats SA on Tuesday, giving the breakdown of how the local economy was battered by the fallout of the floods that hit parts of KwaZulu-Natal earlier in 2022. A contraction of 0.7% in the second quarter is expected.
The Bureau for Economic Research (BER) at Stellenbosch University and Rand Merchant Bank (RMB) will on Wednesday also reveal the closely watched business confidence for the third quarter.
BER and RMB will on Thursday also release a consumer sentiment survey for the third quarter.
Manufacturing production for July will also be published on Thursday by Stats SA, with output likely to have risen 4.1% year on year, according to a Bloomberg median estimate.
The following companies will report results on Monday: branded consumer products company AVI, diversified industrial conglomerate Bidvest, retail distribution and warehousing firm CA Sales, fixed-security specialist Trellidor and food and logistics group RCL Foods.
Source: businesslive.co.za
