MARKET WRAP: JSE has good month, led by precious metal miners

The JSE closed higher on Friday, led by gains in Naspers, with the all share posting its best monthly performance since April 2018.

The local bourse benefited from dovish US Federal Reserve commentary in June, and markets have now priced in a 100% chance of the Fed cutting interest rates in July.

Gold miners led the gains for June, with the index up almost 25%, its best performance in three years. Platinum miners added 14.84% in the month, as the price of platinum’s sister metal palladium continued its push higher.

Gold has firmed and the dollar has weakened as the market prices in US rate cuts. Gold is seen as a hedge against loose monetary policy.

The all share gained 0.24% to 58,203.8 points on Friday and the top 40 0.27%. Gold miners rose 0.38% and platinums 0.67%, while banks fell 0.62%. The all share fell 1.25% for the week, but added 4.59% in June.

At 5.47pm, the rand was flat at R14.1516/$. It has gained 3% in June, its best month since January.

Shortly after the JSE closed gold was up 0.16% to $1,411.82/oz and platinum 1.69% to $828.13. Brent crude fell 1.75% to $65.22 a barrel.

The Dow was flat at 26,526.58 points, while in Europe, the FTSE 100 had gained 0.14%, the DAX 30 was up 0.86%, and the CAC 40 0.8%.

Earlier, data showed that  SA switched back to a trade surplus of R1.74bn in May, far better than the R700m Bloomberg consensus.

All eyes are now on the G20 summit in Japan this weekend, with US President Donald Trump and Chinese President Xi Jinping set to meet on Saturday to discuss trade issues. The US-China trade war has been a dominant factor in global markets for more than a year, and any developments at the meeting could prompt volatility in the rand.

President Cyril Ramaphosa is at the summit, and the presidency has indicated he is seeking to attract foreign direct investment (FDI) into SA. The Reserve Bank quarterly bulletin indicated on Thursday that SA recorded FDI of R11.7bn in the first quarter, after outflows of R8.2bn in the previous quarter.

Diversified miner Glencore gained 6.9% to R49.28.

Naspers added 1.48% to R3,419.52.

Brait gave up 3.95% to R18.50.

Basil Read was unchanged at 4c. The company, which went into business rescue in June 2018, said on Friday that it had retrenched staff, reduced the size of its board and moved out of its Johannesburg head office.

Tiso Blackstar Group jumped 17.85% to R3.83, a five-month high. The publisher of Business Day, the Sunday Times, Sowetan and other titles, said after markets closed on Thursday that it had sold its print, broadcasting and content businesses in SA, Ghana and Kenya to Lebashe Investment Group for R1.05bn. 

The week ahead is a busy one, with the Absa purchasing managers’ (PMI) index for June due on Monday, while the SA Chamber of Commerce and Industry business confidence index for the same month is due on Tuesday.

The PMI is likely to remain below the neutral 50-point mark in June, due to subdued local conditions and deteriorating global trade conditions, said Investec economist Kamilla Kaplan in a note.

US non-farm payrolls data on Friday will also be closely watched.

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