MARKET WRAP: JSE recovers a little after dismal week

The JSE pushed a little higher on Friday, lifted by improved sentiment on global markets, although overall it was a poor week for the local bourse.

Domestic equities were under pressure by continued global concern over the US-China trade war, while local corporate news also provided some eye-catching activity during the week.

Massmart ended the week 19.18% lower and Sasol 16.7%, while the all share lost 3.13%, its third-consecutive week of losses.

Negative global sentiment overwhelmed positive local developments, including promises by the ANC of a small, accountable cabinet, as well as a signal from the Reserve Bank that its next move could be a cut.

The oil price also plunged during the week, falling almost 5%, although interest-rate sensitive shares including banks and retailers pushed lower despite this.

Sentiment was a little improved on Friday after US President Donald Trump said on Thursday he was still optimistic a trade deal with China could be reached, offering some respite for local equities.

The all share closed 0.28% higher at 54,423.6 points and the top 40 0.28%. Gold miners lost 2.76% and platinums 1.04%. Banks added 0.41%.

Sasol recovered 0.83% to R356.50. Earlier in the week it said that its Lake Charles project in the US would cost R1.1bn more than it previously expected.

Exxaro gained 4.17% to R161.30 and Kumba Iron Ore 2.5% to R442.03.

Rand hedge British American Tobacco gained 1.14% to R546.07.

Old Mutual fell 3.23% t o R21, after the financial services company on Friday suspended CEO Peter Moyo with immediate effect. Old Mutual cited “material breakdown in trust and confidence” between Moyo and the board when announcing the ‘separation’.

Massmart fell 2.77% to R65.87. It said on Thursday group headline earnings may be at least 50% lower in the six-months to end June compared to the prior period.

Ascendis Health added 0.61% to R4.93, recovering a little from Thursday’s 3.54% fall. It said shortly before markets closed on Thursday that its CEO, Thomas Thomsen’s, contract had been terminated with immediate effect.

Shortly after the JSE closed the Dow was up 0.12% to 25,521.59 points, while in Europe, the FTSE 100 had gained 0.54%, the CAC 40 0.69% and the DAX 30 0.55%.

Gold was flat at $1,283.51/oz while platinum was up 0.13% to $800.18. Brent crude was 0.29% lower at $67.68 a barrel, having slumped 6.2% during the week.

The week ahead could be busy, with markets reacting to the composition of President Cyril Ramaphosa’s new cabinet, as well as the outcome of the EU parliamentary elections.

In terms of the local economic calendar, producer inflation data will be released on Wednesday, while Friday sees the release of trade data for April. The trade account is forecast to have recorded a smaller surplus of R2.5bn in April compared to R5.0bn in March, as trade activity is typically affected by the Easter and public holidays in April, Investec economist Kamilla Kaplan said.

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