MARKET WRAP: JSE gets a boost from trade-war optimism

The JSE climbed along with most international equity markets on Friday, boosted by optimism over the US-China trade war, as well as upbeat economic data.

Earlier, US non-farm payrolls missed market estimates, raising expectations that the US Federal Reserve will cut interest rates in the coming months, something that will benefit global equities and emerging-market debt.

Sentiment was also lifted during the week by better-than-expected GDP data, with SA’s economy rebounding 3.1% during the second quarter. The UK parliament blocked a no-deal Brexit, while a dissipation of tension in Hong Kong also helped improve investor appetite.

The primary good news, however, was that the US and China will resume high-level trade talks in October. Mid-level talks that will set the framework for those meetings are set to take place throughout September.

The all share rose to 55,591.1 points and the top 40 0.2% on the day. The all share rose 0.6% for the week.

Gold miners fell 2.03%. Banks added 1.18%.

Shortly after the JSE closed, gold was up 0.15% to $1,521/oz while platinum rose 0.39% to $964.44. Brent crude fell 0.2% to $60.60 a barrel.

The Dow was up 0.26% to 26,804 points, while in Europe, the FTSE 100 was flat, the CAC 40 had added 0.12%, and the DAX 30 0.37%.

Old Mutual rose 0.49% to R18.36. Earlier, the group lost its bid in the high court to keep its axed CEO Peter Moyo away from work pending its appeal against an earlier unfavourable ruling. The court also ordered the insurer to pay costs.

Sasol slumped 4% to R260.53. On Friday, the group once again delayed the release of its financial results, saying it had extended the scope of a probe into its embattled Lake Charles project in the US.

Metrofile rocketed 16.97% to R1.93. It said earlier it had received a buy-out offer, but its results on Thursday had also pleased the market.

Allied Electronics fell 2.32% to R24.37. It said earlier that three senior executives at one of its subsidiaries had been suspended following an investigation that revealed potential internal irregularities.

Naspers gave back 0.7% to R3,565.

RMB Holdings added 2.26% to R75.22. It earlier upped its dividend 7% to 376c for the year to end-June, lifted by a strong performance by FirstRand, of which it holds 34%.

Sanlam added 1.48%, extending a 2.75% rise on Thursday, when it reported a 4% increase in new business volumes to R111bn in the first six months of 2019. However, headline earnings fell 31%.

Focus in the week ahead is on mining and manufacturing data for July, due on Thursday and Tuesday, respectively.

Mining should rise about 1.1% year-on-year in July while manufacturing should contract 1.2%, said Investec economist Lara Hodes.

“The SA economy remains in a fragile state, operating against a backdrop of subdued activity and persistently low business confidence, which continues to weigh heavily on future growth prospects,” she said. GDP is unlikely to be higher than 0.7% for the year.

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