MARKET WRAP: Flood of disappointing results keeps JSE underwater

A series of disappointing earnings reports put the JSE under pressure on Thursday, with the local bourse suffering broad-based losses.

The global tone was risk off. Earlier the Chinese manufacturing purchasing managers index (PMI) for January fell to a three-year low, while investors were also digesting comments by US officials that a trade deal with China in coming weeks was not assured.

Sentiment was also given a boost as US GDP data for the fourth quarter of 2018 came in better than expected, at 2.6% year on year, compared to market expectations of growth of 2.4%. This helped send the rand back above the R14/$ as the JSE closed.

The all share lost 0.53% to 56,002.1 points and the top 40 fell 0.58%. General retailers fell 1.62%, the resources index 1.59% and food and drug retailers 1.33%.

Gold was down 0.17% to $1,317.25/oz while platinum was up 0.2% to $870.96. Brent crude was flat at $66.26 a barrel.

There was some good local economic news, with producer inflation, as measured by the annual change in the producer price index (PPI), growing 4.1% year on year in January, compared to market expectations of 5% growth.

Balance of trade figures were a little worse than expected, with SA registering a deficit of R13bn in January, compared to market expectations of a deficit of R12.8bn.

AB InBev gained 5.36% to R1,094.63, having earlier reported that revenue grew 4.8% in the year to end-December.

British American Tobacco fell 1.59% to R511.81, despite having said that adjusted revenue grew 3.5% in the year to end-December, while adjusted earnings per share grew 11.8% year on year.

Blue Label Telecoms plunged 25.49% to R4.56, having said earlier that gross profit grew 15% to R1.31bn in the six months to end-November, although it swung into a headline loss per share of 15.02c, compared to headline earnings per share (HEPS) of 166.86c in the prior comparative period.

Liberty Holdings was flat at R103, having reported earlier that normalised HEPS fell 16.7% to 817.9c in the year to end-December.

Massmart slumped 6.43% to R87.11. It reported earlier that headline earnings before restructuring costs fell 22.9% to R1bn in the year to end-December. The retailer slashed its dividend 40.1% to 208c per share.

Spur gained 2.3% to R22.25. It earlier reported that its restaurant sales grew 6.5% in the six months to end-December. This figure, however, excluded sales from Captain Do Regos, which was disposed of in March 2018.

Mondi slipped 5.14% to R331.21. It reported that revenue for the year to end-December grew 5% and profit before tax 25%. The paper and pulp producer declared a dividend of 75 euro cents per share, a 25% increase from the corresponding period.

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