MARKET WRAP: JSE pushes above 56,000 points, led up by platinums

The JSE closed above 56,000 points for the first time in five months on Tuesday, with only property stocks and gold miners under pressure.

Gains were led by retailers and platinum miners, the former benefiting from a stable rand and moderating oil prices. The latter have gained from the price of platinum’s sister metal, palladium, which has continued to push new highs.

Bloomberg reported that there was increasing concern in the market that palladium was entering bubble territory, as the near $700 gap between it and platinum was unsustainable.

The oil price was recovering slightly from Monday’s losses, when it came under pressure after US President Donald Trump tweeted that he felt prices were too high. As the JSE closed, Brent oil was 2.85% lower for the week.

The all share gained 0.65% to 56,242.8 points and the top 40 rose 0.66%. Platinums added 3.35%, general retailers 1.91% and food and drug retailers 1.17%.

Gold was down 0.25% to $1,323.92/oz while platinum was flat at $853.25. Brent crude was 0.49% higher at $65.01 a barrel.

There was some domestic corporate and economic news to give the local bourse direction.

The Reserve Bank’s leading business cycle indicator for December came out at 105.2 points, versus 105.7 in November, raising concerns that economic growth in 2019 may be slightly worse than expected.

The data was concerning, but further releases would be required before any determination on SA’s growth prospects in 2019 could be made, said Investec chief economist Annabel Bishop. “However, what has become increasingly clear is that economic growth forecasts made at the start of the year for 2019 are at increasing risk of being downgraded,” Bishop said.

Assore fell 1.09% to R362. It said earlier that headline earnings for the six months to end-December increased 20% to R2.92bn.

Rand hedge British American Tobacco fell 1.36% to R517.31, while Richemont was up 1.9% to R106.90.

Shoprite jumped 4.89% to R169.75. It earlier declared a R1.56 interim dividend to end-December, down from R2.05 in the matching period. The group reported overall sales remained flat at R78bn, weighed down by a 13% decline to R11bn from its rest of Africa stores. The company experienced losses due to hyperinflation in Angola.

Wilson Bayly Holmes-Ovcon (WBHO) added 3.2% to R116. It earlier reported net profit of R79m for the six months to end-December, a fifth of the R404m in the corresponding period. Headline earnings per share similarly fell 80% to 145.6c from 726.8c. WBHO said it had underestimated the amount of work required in a contract to upgrade roads in Melbourne, Australia.

Shortly after the JSE closed the Dow was down 0.29% at 26,017.37 points, while in Europe, the FTSE 100 was off 0.3% and the DAX 30 0.24%, while the CAC 40 was flat.

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