MARKET WRAP: JSE tracks weaker international markets

The JSE ended Monday lower as international markets reeled from news that the US-China trade deal was far from concluded.

Continued chaos in Hong Kong, including the shooting of some protesters, added to the gloomy global sentiment, with local retailers faring worst.

If the situation deteriorates, it will not only drag local equities lower but the region as a whole, said FXTM chief market strategist Hussein Sayed. The risk of US-China trade-war disappointment was also high, especially if a deal did not include the rollback of further tariffs, Sayed said.

Hong Kong’s Hang Seng index fell 2.62%, its biggest one-day fall since August 5.

The JSE slipped 1.5% on Friday when US President Donald Trump disappointed the market by suggesting the US had not agreed to roll back tariffs on China. Hopes that the world’s two largest economies were closing in on a partial deal had lifted global equities earlier last week.

By Monday’s close the JSE all share was down 0.78% to 56,174.90 points, while the top 40 fell  0.85%. General retailers were down 1.86%, food and drug retailers 1.61% and the resources index down 1.13%.

Gold fell 0.47% to $1,452.20/oz and platinum 1.63% to $875.43. Brent crude was flat at $62.62 a barrel.

Massmart relinquished 4.41% to R44.19, Shoprite 2.76% to R134.01, Mr Price 2.85% to R156.74, TFG 2.09% to R157 and Woolworths 1.98% to R58.42.  

Diversified miner Glencore lost 2.26% to R47.19, Anglo American 1.63% to R384.18 and BHP 0.97% to R324.38.

Road builder Raubex ended the day flat at R19.74. The third-largest construction company on the JSE by market cap said earlier that headline earnings per share (HEPS) for the six months to end-August rose 64.1% to 58.6c, with the company having received a boost from contract work for independent power producers (IPPs).

Vodacom fell 0.36% to R134.51 after reporting that HEPS rose 18.9% to R4.60 and net profit 20.8% to R8.2bn in the six months to end-September. The company declared an interim dividend of R3.80, down 3.8% from the year-earlier period, though it declared a special dividend of 60c per share.

Aspen Pharmacare leapt 3.98% to R117.70, its biggest one-day gain in more than a month. It said earlier it had agreed to sell its Japanese operations to Sandoz, a division of Novartis, for €400m (R6.58bn). It said the sale put it on track to meet its debt-reduction targets by the end of its financial year.

Africa’s biggest pay ——TV group Multichoice earlier reported higher core earnings as it added new subscribers and narrowed losses in its rest of Africa operations. It said headline earnings rose 24% to R1.9bn in the six months ended September. Its share price closed little changed at R133.42.

Novus slumped 5.56% to R2.55. The printing and manufacturing group said on Monday lower demand across its print category weighed on its results in the six months to end-September. Group revenue declined 3% to R2.22bn, with HEPS falling 40.5% to 29.4c.

Nedbank fell 1.32% to R239.45, Standard 0.72% to R175.39 and Absa 0.42% to R161.93. Absa said earlier it had received approval from US regulators to open an office in New York, which will allow it to be closer to institutional and corporate clients investing in Africa.

The rand was a little weaker against global currencies, with concern over the US-China trade deal weighing on global risk assets. At 6.23pm it had lost 0.18% to R14.8722/$, 0.3% to R16.4136/€ and 0.71% to R19.1337/£. The euro was little changed at $1.1037.

Local bonds were a little weaker with the yield on the R2030 rising three basis points to 9.19%. Bond yields move inversely to their prices.