MARKET WRAP: JSE ends short week slightly weaker as market navigates Turkish contagion

The JSE closed slightly lower on Friday to end a shortened week higher as the most serious emerging-market contagion in a decade hit the markets, with emerging-market currencies tumbling to annual lows.

The Turkish lira fell nearly 20% against the dollar on the day, the worst setback for any emerging currency in recent times. The rand fell 3% against the dollar, weakening above R14 for the first time since November last year.

A weaker rand normally supports rand hedge shares and miners on the JSE, but few investors were brave enough to enter the market under the volatile trading conditions and global uncertainty. Banking, property and retailer shares on the JSE were the hardest hit; however, gold stocks and resources were higher.

The all share closed 0.14% lower at 57,703 points and the top 40 lost 0.07%. Banks lost 3.5%, financials 2.13%, general retailers 1.99% and property 1.19%. The gold index rose 4.45%, resources 1.56% and platinums 1.09%.

The market was looking forward to some recovery in the rand this week, with a number of important company results reported. Sappi closed 2.7% higher at R100.90. It is set to report third-quarter numbers on Monday, with little change from the second quarter expected, with operating performance affected by a stronger rand.

Curro was up 0.67% at R31.66 ahead of interim results on Tuesday. The company earlier gave guidance for headline earnings per share (HEPS) growth of 20% to 27%.

Thursday is set to be a big reporting day, with Standard Bank and Gold Fields reporting interims and Truworths and City Lodge annual numbers.

Standard Bank closed 4.01% lower at R188.04 on Friday amid foreign selling. The bank had previously indicated asset growth remained subdued, despite somewhat improved business confidence.

Gold Fields expects basic earnings per share to be at least 20% lower than the corresponding period in 2017. It closed 2.91% higher at R48.50.

Truworths lost 2.82% to R81.22. Management has indicated that annual headline earnings will be 1% to 3% weaker.

City Lodge ended the day 0.36% up at R145.99. The group earlier gave guidance that revenue had declined in the first half of the financial year.

The rand was at R14.0731 to the dollar from R13.707 in late trade. The R186 was bid at 8.85% from 8.68%.

The top 40 Alsi futures index dropped 0.08% to 51,500 points. It ended the week 1.19% up. The number of contracts traded was 22,287 from Wednesday’s 18,638.