MARKET WRAP: JSE lower as precious-metal miners plunge

The JSE closed a little lower on Thursday, with gold and platinum stocks under pressure, in what many analysts said was a technical sell-off.

Capitec, however, performed well, jumping 3.86% to R1,340. It earlier reported that headline earnings per share (HEPS) rose 19% in the year to end-February, towards the upper end of the expected 17% to 20% rise expected by the market.

The mood on global markets was somewhat subdued, amid fears of slowing global economic growth. Earlier, US GDP numbers for the fourth quarter were revised downwards to 2.2%, from 2.6% previously.

The JSE all share fell 0.16% to 56,059.5 points while the top 40 was flat. Platinums slumped 7.34% and gold miners 6.15%.

Shortly after the JSE closed, the Dow was up 0.28% to 25,695.19 points, while in Europe the FTSE 100 had added 0.8%, the CAC 40 0.21% and the DAX 30 0.32%.

At the same time gold had lost 1.12% to $1,294.85/oz and platinum 0.8% to $843.12. Brent crude was 0.84% lower at $67.25 a barrel.

Amplats lost 7.6% to R728.09, Lonmin 8.32% to R14.10 and Impala 7.69% to R60.01.

Sibanye-Stillwater plunged 10.21% to R15.57.

Platinum miners are facing wage talks with the Association of Mineworkers and Construction Union (Amcu) later this year. Amcu’s strike at Sibanye’s gold operations is in its fifth month.

Earlier, the Reserve Bank kept interest rates unchanged as expected, but governor Lesetja Kganyago warned that the rand faced numerous international risks, including Brexit and the US-China trade war.

Inflation expectations are contained, but the Bank lowered its GDP growth forecast for 2019 to 1.3%, from 1.7% previously.

Local data was somewhat downbeat, with producer inflation, as measured by the annual change in the producer price index (PPI), rising 4.7% in February. The Trading Economics consensus forecast had been for a 4.6% rise.

There are concerns that rising oil prices could push up inflation, following a 74c/l petrol price increase in March. Analysts said SA was currently on track for a R1.05/l increase in April.

International focus was on US-China trade talks, which resumed on Thursday. Brexit uncertainty also continues, with the UK parliament failing to endorse any clear way forward for the UK’s exit from the EU during a series of votes on Wednesday evening.

Volatility in the Turkish lira is also threatening to dent sentiment towards the rand. The lira weakened as much as 5% at one point on Thursday.

Rand hedge British American Tobacco gained 1.89% to R603.15 and AB InBev 0.82% to R1,216.97.

Ayo Tech was unchanged at R15. It said earlier it expects after-tax profit to surge by between 206% and 226%, to at least R202m, in the six months to end-February. The company said this was due to organic growth and from positive contributions from a recently acquired subsidiary.

Vodacom slipped 2.98% to R110.36.

TFG fell 1.98% to R156.90.

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