MARKET WRAP: JSE firms despite worst day for property in eight months

The JSE gained more than 1% on Wednesday, after a strong performance from Naspers and banks, even as risk events loomed.

Property stocks were under pressure after Nepi Rockcastle plunged 14.07% to R99.14. This followed the publication of a report by short-selling firm Viceroy Research, which alleged the stock was overvalued, and that its earnings were substantially lower than reported.

Local news was downbeat, but a stable rand offered support to banks and some retailers.

The all share rose 1.05% to 51,895.1 points and the top 40 1.27%. Industrials gained 1.69% and banks 1.14%. Property stocks tumbled 2.83%, their worst one-day performance since March.

Globally, comments from White House officials that were somewhat optimistic that progress could be made between the US and China during talks at the weekend, bolstered risk sentiment a little, although investors remain cautious.

US Federal Reserve chair Jerome Powell is set to give a speech at 7pm local time, while producer inflation data on Thursday, and the Group of 20 (G20) summit on Friday remain risk factors.

Local data was somewhat disappointing, but indicated particularly bad news for homeowners.

The FNB-sponsored quarterly poll done by the Bureau for Economic Research (BER) found the third-quarter’s consumer confidence index fell to seven points from 22 points — far lower than the economists’ consensus of 17 points.

The deterioration in consumer sentiment during the third quarter of 2018 could mainly be ascribed to substantial drops in the economic outlook and household financial prospects sub-indices of the index, FNB said, where the indices plunged by 24 and 18 points respectively.

Property owners were facing uncertainty in the face of land expropriation without compensation, said FNB chief economist Mamello Matikinca. “Add in negative developments in terms of the rand exchange rate, fuel prices and share prices and one can appreciate why consumers are less optimistic about SA’s economic prospects and the outlook for their household finances compared to earlier in the year.”

Diversified miner Glencore gained 2.88% to R51.48, Anglo American 1.92% to R278.22 and BHP 1.53% to R269.

Rand hedge AB InBev gained 1.41% to R1,057.53 and British American Tobacco 1.39% R492.76.

Standard Bank added 2.42% to R177.45.

Bidcorp fell 2.09% to R270.90, despite earlier releasing a trading update in which it reported solid trading profit in Europe, and “satisfactory” growth in SA.

Arrowhead Properties jumped 5.76% to R4.22, despite earlier lowering its dividend for the year to end-September to 74.1c per share compared with 87.52c in the previous period.

Shortly after the JSE closed the Dow was up 0.77% to 24,937.94 points, while in Europe, the FTSE 100 had gained 0.18% and the CAC 40 0.25%, while the DAX 30 was flat.

At the same time platinum had fallen 1.63% to $820.08 an ounce and gold 0.22% to $1,212.10. Brent crude was 2.13% lower $59.66 a barrel.

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