MARKET WRAP: Miners keep JSE lower as Sasol plunges almost 13%

The JSE pushed higher on Wednesday, led by banks, as positive local political and economic news took some risk out of domestic risk assets.

The rand firmed a little after a number of ANC officials reportedly declined to be deployed to state positions until cleared of allegations of impropriety against them, notably the party’s deputy president, David Mabuza.

Markets have been watching closely for signs that President Cyril Ramaphosa’s cabinet will take a tough stance on corruption and financial mismanagement, analysts say, and the withdrawal of individuals with serious allegations of misconduct against them is being viewed positively.

Economic news was also good, with inflation slowing to 4.4% year on year in April, slightly below market expectations. 

Corporate news was a little less positive, with Sasol slumping 12.99% to R375, after saying earlier its Lake Charles project in the US may cost $1.1bn more than previously expected.

The rand firmed on Wednesday, gaining 0.12% to R14.3755/$ as the JSE closed. This helped support banks and retailers, but a weaker oil price put pressure on diversified miners.

The all share fell 0.53% to 55,231.1 points and the top 40 0.59%. Food and drug retailers gained 1.5% and banks 1.21%. The resources index slipped 2.41%.

Shortly after the JSE closed gold was flat at $1,275.50/oz while platinum had fallen 1.11% to $807.45. Brent crude was 1.36% lower at $71.02 a barrel.

The Dow had fallen 0.29% to 25,802.56 points, while in Europe, the FTSE 100 and DAX 30 were flat, and the CAC 40 had fallen 0.29%.

Diversified miner Glencore fell 3.28% to R48.63.

Standard Bank gained 1.45% to R195.75, FirstRand 1.41% to R65.64 and Absa 1.22% to R166.20.

Rebosis plunged 14.55% to 94c. It said earlier that it had swung into a loss for the six-months toe end-February, largely due to a R2bn write down of its assets in the UK.

Comair was unchanged at R4.40. It said shortly before markets closed on Tuesday that its long-serving CEO, Erik Venter, would be leaving the airline at the end of July.

Tiger Brands was unchanged at R230. It said earlier that revenue from continuing operations fell 2% to R15.4bn in the half-year to end-March.

Local focus on Thursday will be on the Reserve Bank, which will make its latest stance on monetary policy known. Despite the drop in inflation, few expect the Bank to indicate that an interest rate cut is on the cards any time soon.

SA’s economic growth rate was disappointing and unemployment was high, and although inflation was contained, the Bank has made clear it is seeking to anchor inflation at the mid-point of the 3% to 6% target range, portfolio manager at PPS Investments Luigi Marinus said.

Global focus remains on the US-China trade war, although analysts note that some fatigue seems to be setting in, and investors are now seeking concrete signs regarding how the conflict will unfold.

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