MARKET WRAP: JSE tracks losses in US and EU markets

The JSE all share closed lower on Monday as concerns over the Chinese economy weighed on global markets.

Asian stocks reversed earlier gains after the US tentatively ended the longest government shutdown in history. All eyes remain on  the US-China trade talks to see if the two largest economies in the world can settle their differences.

Markets are now awaiting the outcome of the US Federal Reserve’s policy meeting this week.

The JSE ended Monday’s trade 0.52% lower at 53,767.5 points, with the top 40 falling 0.61%. The gold index added 2.02% in the risk-off environment.

Petra shares fell in London on a disappointing trade update. The company reported an increase in its debt burden, citing low diamond prices from its capital-intensive newly developed Cullinan mine. Petra CEO Johan Dippenaar said the average price for the full year through to the end of June was expected to be $120/carat, making the mine cash-flow positive. Its net debt rose to $557 from $521 in June 2018.

MMI Holdings said earlier it had achieved level one broad-based black economic empowerment status, a first for an insurer in SA. The group’s head of transformation Busisiwe Sithole said the new rating was the result of a strategic, committed approach to transformation. Its share price fell 2.15% to R16.83.

Naspers, which constitutes about 20% of the all share index, closed 0.82% lower at R3,015. The media giant confirmed in a statement on Monday that it had raised its shareholding in Russian subsidiary Avito to 99.6%, from 70.4%, in a $1.16bn deal. The balance of Avito’s shares will be held by the company’s management.

“Naspers initially invested in Avito in 2013. Over the past five years, Avito has established leading positions in five key categories: goods; [cars]; real estate; jobs; and services. With 10.3-million daily unique visitors, Avito now attracts a large portion of the Russian internet population every day,” Naspers said.

Pepkor, which has troubled retailer Steinhoff International as a 71% shareholder, earlier reported sales growth of 6.1% for the quarter. Its share price fell 4.29% to R20.10. Given its connection to the scandal-plagued company, the market is still struggling to figure out just how much it is worth, said Sasfin Bank senior equity analyst Alec Abraham.

Most diversified miners gained on the day, despite a drop in commodity prices, with Anglo American rising 1.43% to R331.99 and BHP 1.46% to R290.29.

The banking index relinquished 2.13%, food and drug retailers 1.57% and financials 1.18%, as the rand gave back earlier gains to trade 0.65% off at R13.7059 to the dollar.

Leading the declines in the banking sector was FirstRand, dropping 2.61% to R68.77, while Absa fell 2.44% to R175.61, Standard Bank 2.16% to R190.72 and Nedbank 1.5% to R283.94.

At 7pm Brent crude oil was 2.82% lower at $59.70, while platinum had fallen 0.56% to $810.92.