MARKET WRAP: JSE closes lower with market now cheapest in eight years

The JSE started the week on a negative note as Naspers, together with banks and retailers, led the losers to yet another low for 2018.

The rand firmed to a best intraday level of R14.3546 to the dollar, before losing ground again in choppy trade in a weaker dollar environment on soft US economic data.

US retail sales in September added to market jitters, rising only a monthly 0.1% from an expected 0.6%, pointing to the possibility that US GDP growth might have peaked.

US Federal Reserve watchers will eagerly await the publication of the federal open market committee’s minutes from its September policy meeting on Wednesday. Committee members will have discussed recent strong economic performance and may shed further light on their interest rate and Fed balance sheet projections for 2019, Dow Jones Newswires said.

“Underlying risks in the markets remain plentiful, from Sino-US trade to Brexit, Italy’s budget spat and now German political concerns following state elections in Bavaria,” said Oanda analyst Craig Erlam.

Rhetoric has also heated up between the US and others towards Saudi Arabia after the disappearance of journalist Jamal Khashoggi.

The Dow was flat at the JSE’s close, with European markets edging up marginally as the FTSE 100 hit a six-month low earlier.

The all share ended the day 1.88% lower at 52,467 points and the top 40 lost 2.07%. Industrials dropped 2.98%, banks 2.66%, food and drug retailers 2.37% and financials 2.11%. The gold index rocketed 8.47% after the gold price rose to a three-month high.

RMB Morgan Stanley said in a note that the all share was now the cheapest in eight years. The historic dividend yield, based on dividends paid in the past 12 months, at 3.44% is the highest since 2009 and has only been higher twice in the past 20 years — in 2003 and 2009.

Locally, ratings agency Moody’s opted not to release its expected credit-rating review of SA on Friday, with analysts saying the agency now awaited the medium-term budget policy statement next week.

After firming on Friday, Naspers resumed its downward trajectory with renewed vigour, falling 5.43% to R2,750.18, tracking losses in Hong Kong associate Tencent, which has lost about $250bn in market capitalisation from its January share price high.

FirstRand lost 3.15% to R60.82 and Capitec 1.95% to R970.35.

Shoprite slipped 2.27% to R185.68.

Balwin Properties jumped 7.35% to R3.65, after earlier reporting 18% growth in net asset value per share in the six months to end-August.

Famous Brands was down 8.63% to R93.20 after the group said it intended to book an R874m impairment on the R2.1bn Gourmet Burger Kitchen acquisition

The benchmark R186 bond was unchanged at 9.235%.

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