MARKET WRAP: JSE extends winning streak to fourth week

The JSE closed little changed on Friday, but ended the week firmer, with some equities continuing to benefit from the prospect of global central banks loosening monetary policy in coming months.

Retailers and banks were under a little pressure on Friday, but property stocks and most miners were positive. Gold miners also edged higher, gaining 4.13% this week, the fifth consecutive week of gains.

The price of gold has pushed to a six-year high, boosted this week by dovish commentary from the US Federal Reserve, as well as escalating tension in the Middle East.

Miner’s gains, however, have been partially offset by a firmer rand, which gained 3.36% against the dollar during the week, its best weekly performance in eight months. Shortly after the JSE closed, the rand was 0.23% firmer at R14.3256/$. It reached the week’s best level of R14.19 on Thursday.

The all share ended Friday flat at 58,941.5 points while the top 40 fell 0.11%. Property stocks added 0.96%. Food and drug retailers lost 1.94%. The all share added 1.28% for the week — its fourth consecutive week of gains.

Focus during the week was on the state of the nation address (Sona) on Thursday, but it passed without any major market movements. The speech was light on detail, but overall delivered a positive message, analysts said.

The reaction by Moody’s Investors Service was brief. “The Sona comes in the context of the government’s limited fiscal flexibility amid a challenging economic environment,” said Moody’s lead sovereign credit analyst for SA Lucie Villa. “The recent first-quarter GDP results indicating the sharpest quarterly contraction in the past 10 years, and the February budget pointing to weaker fiscal metrics and a higher government debt burden under the strain of support for Eskom, underscore the credit challenges the country faces.”

Naspers fell 1.05% to R3,4413.59. It said earlier that profit fell 39% to R6.9bn in the year to end-March. The market heavyweight also delayed its Amsterdam listing of NewCo, now called Prosus, until September.

MultiChoice added 1.97% to R134.58, after indicating that it may soon retrench some of its employees involved in customer care, due to customers increasingly using digital forms of communication.

Shoprite slumped 6.36% to R163.50.

Shortly after the JSE closed gold was up 0.27% to $1,391.56/oz while platinum was flat at $805.71. Brent crude had gained 0.96% to $65.15 a barrel.

The Dow was up 0.44% at 26,871.59 points, less than 100 points off the record high it reached in October 2018. In Europe, the FTSE 100 had lost 0.13% and the DAX 30 0.11%, while the CAC 40 was flat.

Locally, the calendar is quite full next week, with employment data due on Tuesday, as well as the Reserve Bank’s quarterly bulletin. Producer inflation numbers for May are expected on Thursday, while private-sector credit extension data and the trade balance are due on Friday.

Global focus next week will likely be on the US-China trade war, ahead of a meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 summit in Japan, which begins on Friday.

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