JSE’s fate tied to Tencent on Wednesday
Naspers’s main asset, Tencent, is scheduled to release its September quarter results on Wednesday morning after the Hong Kong stock exchange closes. Tencent’s share was up 0.44% at HK$275.60 at 6.20am.
Tencent’s share price tends to swing wildly following its results releases. Along with the oil price crashing 7% on Tuesday and imminent cabinet reshuffles in both the US and SA, Wednesday is bound to be a volatile day on the JSE and elsewhere.
The economists’ consensus is that SA’s annual retail sales growth will have slowed from August’s 2.5% to about 2.2%.
A good average over the three months to end-September from retail is needed to compensate for disappointing contributions to GDP from mining and manufacturing, which were reported last week.
“On a quarter-on-quarter seasonally adjusted annualised basis, which is the measure used to calculate GDP, mining production dipped by 8.6% in the third quarter. This suggests that the mining sector will detract from the quarter’s growth outcome, following its 0.4% contribution to the second quarter’s GDP reading,” Investec Economist Lara Hodes said in an e-mailed note.
Regarding manufacturing, Hodes said its contribution to third-quarter GDP is likely to have grown 7.1% in the third quarter.
“This suggests that the manufacturing sector’s two-quarter recession has ended, and that its contribution to overall GDP will be positive in the third quarter.”
Nedbank economist Johannes Khosa said in his weekly e-mailed note: “Most recent statistics suggest that the economy probably returned to growth off a low base in the third quarter, but there are no compelling signs of significant underlying upward momentum yet.”
The rand was trading at R14.44/$, R16.30/€ and R18.75/£ at 6.35am.
Source: businesslive.co.za