MARKET WRAP: JSE gains as markets await further news on the US-China trade war

The JSE closed higher on Tuesday, while global markets were mixed, as developments in the US-China trade war have become fairly muted.

The world’s two largest economies have kept investors on their toes as there seems to be no end in sight to the protracted trade war, which is now well into its second year. Recent reports have fueled expectations that the two parties will soon sign the first phase of a deal after Chinese authorities said the two countries have recently had constructive discussions.

Shortly after the JSE closed, the Dow was down 0.43% to 27,908.05 points, but remains in record territory. In Europe, the FTSE 100 had added 0.19% and Germany’s DAX 30 0.18%, while France’s CAC 40 was down 0.31%. 

Earlier, the Shanghai Composite rose 0.85% and Hong Kong’s Hang Seng 1.55%, while Japan’s Nikkei 225 fell 0.53%.

Markets continue to monitor the pro-democracy protests in Hong Kong as protest action has intensified over the past three days. “We expect more heavy-handed police tactics that could be bad news for investors as well as those on the ground. Hong Kong is still near the top of our list of risk factors,” said London Capital Group head of Research Jasper Lawler.

The rand was the best performing among emerging-market currencies tracked by Bloomberg over the past five days on Tuesday evening.

At 5.30pm, the rand had firmed 0.22% to R14.7805/$, 0.21% to R16.3663/€ and 0.27% to R19.1367/£. The euro was flat at $1.1073.

Gold was little changed at $1,469.44/oz while platinum added 1.13% to $904.89. Brent crude lost 1.04% to $61.60 a barrel.

Bloomberg reported on Tuesday that the yields on Eskom’s 2021 dollar bonds climbed the most in nine months following the appointment of Nampak CEO Andre de Ruyter, suggesting that investors may not be convinced that the new CEO can turn some of the power utility’s challenges around.

The JSE all share gained 1.6% to 57,372.6 points and the top 40 1.73%. Banks rose 1.92% and resources 1.5%.

Investec Asset Management said on Tuesday that it will soon change its name to Ninety One as part of its de-merger from Investec Group. It said the separation is on track for completion in the first quarter of 2020. Investec Ltd gained 1.59% to R84.98. 

Coronation Fund Managers reported a 14.5% decline in revenue to R3.3bn in the year to end-September. The company also said it expects net flows to remain negative as the savings industry battles a weak economic environment. It declared a dividend of R3.41, down 18.8% from the previous year. Coronation’s share price gained 3.79% to R43.30.