JSE should follow upbeat Asian markets as global risks abate

Easing global political risks and news that the US and China will resume trade talks boosted Asian markets on Thursday morning, boding well for the JSE on a busy day for corporate releases.

Chinese and US officials plan to hold high-level talks in Washington in early October, with Dow Jones Newswires reporting that parties intend a series of mid-level talks for September to set the ground work for a deal.

Political risks have also eased in Europe and Asia, with the UK parliament blocking a no-deal Brexit, while the Italian president has given permission for a new coalition government, ending the prospect of a turbulent election in Europe’s fourth-largest economy.

Hong Kong authorities have also withdrawn a contentious extradition bill that had sparked weeks of protests in the financial hub.

Asian markets were sharply higher on Thursday morning, with the Shanghai Composite up 1.58%.

Tencent, of which JSE heavyweight Naspers holds a sizable chunk, was up 1% in Hong Kong.

Gold had slipped 0.5% to $1,544.44/oz, while platinum was flat at $986.15. Brent crude was 0.18% higher at $60.60 a barrel.

The rand extended its gains, pushing to R14.75/$ as of 6.30am, its best level in over a month.

Short-term strength is certainly dominating the market, but a bias back to R15.50/$ in the medium term remains, said Peregrine Treasury Solutions corporate treasury manager Bianca Botes in a note.

The corporate calendar is busy, with Impala Platinum expected to report that rising prices of platinum-group metals and higher sales volumes resulted in a 518% surge in gross profit to R6.8bn for the year to-end June. 

FirstRand is expected to report its results for the year to end-June, but has not released a trading statement, implying that headline earnings per share (Heps) has not moved in a range exceeding 20%. In the prior financial year it declared a final dividend of 275c a share, up almost 8% year on year.

Assore is expected to say later that Heps has risen by between 20% and 28% in its year to end-June, boosted by higher iron ore prices.

Property group Hyprop, which is in the midst of reducing its exposure to African investments, is due to report its results to end-June later. In the previous financial year, it upped its distribution 8.7% to 756.5c a share.

Property group Fairvest, which recently terminated its merger plans with Safari by mutual agreement, is also expected to release its results to end-June. It has not released a trading statement, but in the previous year it upped its distribution 9.91% to 20.15c a share.

Private equity investment company Universal Partners is expected to release its results to end-June, but has not released a trading statement. It reported in May, however, that its net asset value per share for the nine months to end-March rose 3.6% to £1.07.

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