MARKET WRAP: JSE tracks firmer global markets

The JSE closed higher on Tuesday, tracking world markets as investors digested global political developments.

Former London mayor Boris Johnson was voted in as leader of the UK’s Conservative Party on Tuesday, defeating Jeremy Hunt with 66% of the votes. He is now set to succeed Theresa May as Britain’s new prime minister.

News reports that the US and China may soon resume trade negotiations also lifted sentiment after officials from both countries spoke by phone late last week. The two economic superpowers agreed to revive talks after meeting at the G20 summit in June.

Locally, investors were closely watching the special appropriations bill, which allocated R59bn to Eskom. The troubled power utility will receive a bailout of R26bn in the 2019/2020 financial year and R33bn for 2020/2021.

Shortly after the JSE closed, the Dow Jones had gained 0.35% to 27,266.21 points after better-than-expected earnings reports from some companies. In Europe, the FTSE 100 had gained 0.74%, France’s CAC 40 1.27% and Germany’s DAX 30 1.94%.

Earlier, the Shanghai Composite rose 0.45%, Hong Kong’s Hang Seng 0.34% and Japan’s Nikkei 225 0.95%.

Soon after the JSE closed, the rand had weakened 0.15% to R13.8803/$, while it had firmed 0.35% to R15.4843/€ and 0.18% to R17.2670/£, having reached its best level to the pound in 11 months during intra-day trade. The euro was 0.47% weaker at $1,1156. 

Gold was flat at $1,424.51/oz while platinum added 0.72% to $853,46. Brent crude fell 0.54% to $63 a barrel. 

The JSE all share rose 0.51% to 58,309.60 points and the top 40 0.61%. Banks and resources gained 0.86% and 0.69%, respectively.

Standard Bank added 1.34% to R192.32, FirstRand 0.92% to R64.97, Absa 0.59% to R169.99, and Nedbank 0.5% to R251.82.

Phumelela Gaming and Leisure jumped 15.38% to R3.

PPC fell 4.41% to R4.55.

Naspers rose 0.68% to R3,492.28 after its Hong Kong subsidiary Tencent earlier gained 0.28%.

Impala Platinum rose 2.23% to R73.50 after it said on Tuesday that 88% of the holders of its $250m convertible bond have accepted a cash and share offer to terminate it.

BHP gained 0.87% to R353.96 after the global diversified miner said on Tuesday that it would invest $400bn towards reducing carbon emissions.

Mondi Plc rose 1.93% to R314.17 after it said earlier earnings before interest, tax, depreciation and amortisation (ebitda) were expected to be higher than the prior period’s €852m, with basic earnings per share expected to rise by between 28% and 37%.

Kumba Iron Ore fell 2.93% to R475.90 after it said on Tuesday that its shareholders will receive a dividend of R30.79 per share for the six months ended June.

Reinet gained 1.37% to R244.70, despite saying on Tuesday that its net asset value decreased 6.4%, to about €4.52bn, for the quarter ended June.

Statistics SA is scheduled to release consumer price inflation figures for June on Wednesday. The consensus among analysts is for inflation to come in at 4.4% year-on-year, from 4.5% in May, according to a Bloomberg poll.

Focus will shift to Europe on Thursday as the European Central Bank (ECB) is set to announce its latest stance on monetary policy, after its president Mario Draghi hinted last month that it may implement some easing.

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