MARKET WRAP: Poor economic data pushes JSE to six-week low

The JSE closed lower on Wednesday, with poor local and international economic data ultimately weighing on local equities.

The market began the day edging higher, as investors brushed off data showing that growth in Chinese industrial output, investment and retail sales all slowed in April.

Instead, markets had seized upon a softer tone by US President Donald Trump regarding the trade war with China. Trump suggested on Tuesday that a deal could still be on the cards.

Sentiment turned negative later in the day, following the release of downbeat US retail sales data for April. Retail sales fell 0.2% compared to March, while the market had expected 0.2% growth.

Local data was also disappointing, adding to the pressure on the JSE. SA retail sales grew 0.2% in March on an annualised basis, much worse than the 0.6% growth expected by the market.

The grim figures add to the evidence that SA’s economy contracted in the first quarter, probably at a rate of 2%, said Capital Economics senior emerging-markets economist John Ashbourne.

The all share fell 0.34% to 56,043.2 points and the top 40 lost 0.4%. Banks fell 1.09% and general retailers 1.61%. Gold miners added 1.35% and property 0.38%.

There was also a series of corporate earnings reports to give the market direction, including some from offshore.

Among the bigger losers, Naspers fell 1.08% to R3,314, despite better-than-expected results from Hong Kong-listed Tencent. Tencent, of which Naspers holds a 31.2% stake, reported that net income grew 17% in its first quarter. The Competition Commission, however, said earlier that Naspers’s acquisition of local vehicle-purchasing service WeBuyCars should be blocked, as it could lead to higher used-car prices in SA.

Spar added 0.11% to R198. It said earlier that group turnover for the six months to end-March rose 8.6% compared the prior corresponding year, with the retailer upping its interim dividend 5.2%.

Balwin Properties jumped 7.24% to R3.11 despite it saying headline earnings per share (HEPS) fell 8% to 95.82c in the year to end-February compared to the prior corresponding period. It did, however, report a 15% rise in net asset value per share to 567.51c and that revenue rose 6% to R2.6bn.

MTN added 1.25% to R99.52. Its Nigerian business — which accounts for a third of the group’s profits — listed on that country’s stock exchange earlier.

Gemgrow was unchanged at R5.55. It reported on Wednesday that total dividends for the six months to end-March edged 1% lower to R178.3m, while finance charges grew 71% to R91.7m and property expenses 23% to R163m.

Long4Life gained 3.61% to R4.88.  It said profit after tax for the year to end-February rose to R356m from R169.7m previously.

Shortly after the JSE closed the Dow was flat at 25,544.34 points, while in Europe, the FTSE 100 had risen 0.73% and the DAX 30 0.53%. The CAC 40 was flat.

At the same time gold was little changed at $1,296/oz, while platinum had fallen 1.46% to $844.13. Brent crude added 1.1% to $71.64 a barrel.

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