MARKET WRAP: JSE suffers third straight month of losses

The JSE closed lower on Monday, concluding its third month of losses as fears that tension over trade between the US and China may reach new heights. 

Investors reacted to reports that the US administration may consider limiting capital flows to China including delisting Chinese companies from US stock exchanges.

China’s foreign ministry spokesperson Geng Shuang said on Monday that he hopes the US will take a “constructive attitude” towards resolving differences between the two countries, Reuters reported.

“It seems every time we take a step forward with the trade war and optimism rises ahead of a meeting between the two teams, we get some negative headlines,” said senior market analyst at Oanda Craig Erlam. 

“We are becoming used to threats ahead of these talks but any follow-through here would be rather dramatic,” Erlam said. 

Earlier, the Shanghai Composite fell 0.92% and Japan’s Nikkei 225 0.56% while Hong Kong’s Hang Seng rose 0.53%. 

At 6.10pm the Dow was up 0.54% to 26,964.70 points. In Europe, the FTSE 100 was down 0.24% while France’s CAC 40 added 0.66% and Germany’s DAX 0.38%.

The rand fell 0.25% to R15.1613/$ and has dropped more than 7% in the third quarter of 2019; it had weakened 0.29% to R18.6532/£ while it was flat at R16.5349/€. The euro was little changed at $1.0906.

Gold lost 1.87% to $1,468.76/oz and platinum slumped 5.28% to $882.78. Brent crude was 2.63% Lower at $60.26 a barrel. 

SA’s trade balance shifted to a surplus of R6.84bn in August, data from the SA Revenue Service showed on Monday. Exports increased by 8.4% from July while imports fell by 1%. 

“While August is only one month, it has seen some improvement to the trade balance, but does not yet capture the higher oil price following the recent damage to Saudi production. September has seen the rand oil price rise to R925 a barrel to date, well up on the average in August of R904,” said Investec economist Annabel Bishop.

The JSE all share fell 0.7% to 54,825 points and the top 40 0.72%. Banks dropped 1.84% and gold miners 1.62%. The banking index is down 10% in the third quarter while gold miners have jumped 12.12%. 

Absa fell 3.55% to R152.87, Nedbank 2.23% to R226.82, Standard 1.75% to R174.69 and FirstRand 1.6% to R62.19.

Accelerate Property slumped 8.42% to R1.74 after the company said on Monday that rental reversions and additional costs at its Fourways Mall will result in distributions per share falling as much as 15% in its year to end-March 2020.

Chemical group Rolfes said on Monday that its headline earnings per share increased by 95% to 23.87c in the year to end-June. Its share price was unchanged at R2.77.

MC Mining dropped 2.3% to R5.95, after earlier reporting a $33.7m loss in the year to end-June which is a 67% improvement from the previous year.

The Absa manufacturing purchasing managers’ index (PMI) for September is set to be published on Tuesday, with consensus for it to have risen to 46.5 index points, according to a Bloomberg poll, from 45.7 in July.

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