JSE starts week on upbeat note as Naspers continues to climb

The JSE closed higher on Monday as positive global sentiment supported risk-on trade, on a firmer euro.

The all share pared some of its intraday gains as the euro lost some ground toward the close, but overall sentiment remained positive.

Diversified miners turned negative towards the end of the day with gold shares also losing ground — albeit with little change in the metal price — and erratic trade in the dollar.

Analysts warned that the positive sentiment might not last, despite a strong opening on the Dow and positive European markets.

“While US trade policy continued to undermine sentiment, recent economic data continued to offer encouragement to equity markets,” Momentum Securities analysts said in a note.

Naspers was one of the bigger drivers of the market on the day, at one point rising nearly 3%, before losing steam towards the close. After climbing 5% on Friday, the market heavyweight ended the day up 2.18% at R3,268.75.

Co-manager of the Old Mutual Edge 28 Fund at Old Mutual Investment Group Arthur Karas said it was unrealistic to expect Naspers to continue to outperform the market forever.

Trading at a price-to-earnings ratio of 93, Naspers is down 5.28% in 2018, after having rocketed 71.34% in 2017. It owns 31.2% of Chinese internet company Tencent, which remains the main driver of growth in its shares.

“Over the past year, however, we have sold quite a bit of our Naspers holding — around 2% of the fund — because Tencent began looking expensive and Naspers’s corporate governance issues came to the fore,” he said.

The all share closed 1.03% higher at 57,870.90 points and the top 40 gained 1.04%. Banks added 2.66%, financials 1.82%, food and drug retailers also 1.82%, industrials 1.27% and general retailers 0.75%. The gold index lost 0.76% and resources 0.47%.

Anglo American slipped 0.4% to R309.55.

Sasol lost 0.43% to R479.45, as Brent crude dropped 1.29% to $75.58 a barrel.

Richemont rose 0.51% to R116.85.

Remgro firmed 1.32% to R209.55 amid reports it could be a potential investor in Steinhoff Africa Retail.

Standard Bank jumped 2.63% to R216.63.

In the property sector Sirius dropped 0.96% to R11.29 after reporting an 8.2% increase in its annual dividend.

Tongaat Hulett shed 0.35% to R78.90 after slipping 2.25% on Friday following Investec’s call for its CEO Peter Staude to step down, describing its recent results as “appalling”.

The top 40 Alsi futures index gained 1.3% to 51,750 points. The number of contracts traded was 29,197 from Friday’s 23,674.