MARKET WRAP: JSE ends week higher on improved risk sentiment

The JSE closed firmer on Friday, ending the week in positive territory for the first time in four weeks.

Banks, financials and retailers rallied on the day, supported by industrials, as global risk-on sentiment dominated markets on renewed weakness in the dollar.

The Dow opened firmer on Friday, following in the footsteps of European markets.

The dollar lost ground as markets expect the fallout from trade tension between the US and China to be less severe than previously thought. Market participants instead focused on the strong fundamental outlook, including solid corporate earnings and a robust US economy, which is growing at its fastest pace since 2014, Dow Jones Newswires said.

“Risk is having a great time at the moment,” said Jim Reid, an analyst at Deutsche Bank, in a note to clients. Investors are also training their eye on next week’s US Federal Reserve meeting. Most watchers are expecting the central bank to raise interest rates, he said.

The all share ended Friday 1.09% higher at 57,164.30 points, with banks up 3.16%, general retailers 2.21% and financials 1.97%. Platinums rocketed 6.95% but the gold index dropped 1.14%. The all share gained 1.03% in the week.

The rand firmed to R14.1833 in intra-day trading, its best level in a month, before retreating in later trade. Some of the earlier gains came following the Reserve Bank’s decision to keep rates on hold on Thursday.

Local bonds edged marginally weaker on Friday, with the yield on the benchmark R186 government bond bid at 9.09% from 9.08%. Despite the firmer rand environment the R186 has failed to break through 9%, as the US 10-year rose above 3% over the past week. It was last seen at 3.0687% from 3.063%.

Apart from the economic data set to be released next week, a number of smaller companies will report results. These include construction group Aveng and healthcare group Ascendis.

Aveng said in a trading update that its headline loss per share for the year to end-June will to fall to between R2.97 and R3.29, from the previous year’s reported R16.25. Its share price was flat at 4c on Friday.

Ascendis management said it was targeting improvement in its earnings before interest, tax, depreciation and amortisation (ebitda) margin, from 17% to 18% over the medium-term. Ascendis closed 0.38% lower at R10.50 on Friday.

Focus later in the week will be on Capitec’s interim results. The company expects headline earnings per share to increase by between 18% and 21% for the period to end-August. It closed 4.75% higher at R975.21 on Friday.

South African markets are closed on Monday for the Heritage Day public holiday on Sunday.