JSE up 7% on the back of a barrage of stimuli

CAPE TOWN – The JSE, after another week of unprecedented volatility, traded more than 7percent higher at midday on Friday as it tracked surging global markets that were reacting to a barrage of stimulus measures unleashed by central banks and governments to block the economic shocks from the coronavirus.

The rally followed announcements by the US Federal Reserve, European Central Bank and Bank of England about big new injections of funds into financial markets. Governments have committed trillions of dollars in new spending and credit guarantees to help support their economies.

On the JSE, local sentiment was also boosted by Thursday’s 100 basis point repo rate cut, and moves by the South African Reserve Bank (SARB) to boost liquidity in the money market.

Out of the top 10 biggest gainers on the JSE on Friday morning, I chose to write about five that arguably present good defensive properties to investors, given the state of the markets. The five are: Capitec, Sibanye-Stillwater, Aspen, Dis-Chem and Anheuser-Busch InBev.

Capitec, pioneering paperless bank and the biggest bank by number of customers, on Friday regained some of the 30percent decline in the share price at one stage the day before, and a 28percent slide in share price on Wednesday. The lower declines, a feature of all the local banks, had been led by international investors selling in the wake of a weakening rand.