MARKET WRAP: Rise in commodity prices gives miners a boost

Miners had a good day on the JSE on Wednesday as commodity prices rose in a fairly risk-averse global environment. The gains in the sector were, however, not enough to pull the overall market higher.

Asian and European markets were all lower, as was the Dow in early trade in the US.

Retailers did surprisingly well on the JSE, despite retail sales for September roundly missing the mark. Statistics SA earlier reported a year-on-year gain of 0.2%, while the markets had expected 1.9%. This followed growth of 1.1% in August, while third-quarter retail sales also rose 1.1%.

Investor sentiment took a dip on Tuesday following a series of comments by US President Donald Trump. In a speech in New York, Trump hit out at the EU for its tariffs, while also not offering any hope that the US is considering rolling back tariffs on China after a partial deal reached in October.

Trump, in fact, threatened to “substantially” raise tariffs on China, which, along with ongoing protests in Hong Kong, is giving investors cold feet, said London Capital Group senior market analyst Ipek Ozkardeskaya in a note.

“While not wholly unexpected, still … the market was hoping for a glimmer of concession,” said AxiTrader senior Asian markets analyst Stephen Innes in a note. At this point, markets will probably have to wait until a deal is signed, or not, for clarity on the rollback of tariffs between the two countries.

By the close on Wednesday, the all share was down 0.11% to 56,338.3 points, with the top 40 falling 0.19%. Gold miners rose 5.14%, the platinum index 3.56% and resources 0.95%. Banks lost 1.19% and industrials 0.56%, while general retailers, and food and drug retailers, added 0.14% and 1.11%, respectively.

Gold was up 0.51% to $1,456.11/oz and platinum 0.41% to $884.34. Brent crude had gained 0.53% to $62.30 a barrel.

Harmony led gains in the gold sector, shooting up 8.01% to R49.08, while Royal Bafokeng Platinum rose 6.71% to R43.74. Sibanye-Stillwater added 5.46% to R28.

Exxaro was up 3.83% to R130, Kumba Iron Ore 3.77% to R382.32, African rainbow Minerals 3.68% to R154.50, and Assore 2.77% to R230. 

Spar leapt 5.5% to R209. It earlier raised its dividend 9.7% to R8.80 a share for the year to end-September. In its Southern Africa operations liquor sales surged 17.6% in the year to end-September.

Pick n Pay gained 1.6% to R69.80 and Clicks 1.02% to R256.48, while Massmart fell 2.01% to R43.78, bringing its 2019 losses to nearly 58%.

Prosus fell 2.36% to R994 after Tencent, in which it owns substantial share, earlier reported a quarterly drop in earnings of 13%. Bloomberg said Tencent’s net income missed the lowest analyst’s estimate after a weakening economy hurt advertising revenue. Prosus’s parent Naspers was down 2.25% to R2,1065.30.

Tsogo Sun Gaming said on Wednesday that an increase in the cost of debt as a result of the unbundling of Tsogo Holding’s hotel interests in June will weigh on headline earnings for the six months to end September. Headline earnings per share (HEPS) are expected to fall by between 11% and 15% from the prior period’s 77.2c. Shares in Tsogo Gaming and Tsogo Hotels rose 3.48% and 3.06%, respectively, to R12.50 and R3.70.

Earlier, among Asian markets, Hong Kong’s Hang Seng relinquished 1.82%, with the ongoing political protests there souring the mood.

In Europe, the FTSE 100 was last seen down 0.2%, with France’s CAC 40 0.15% lower and the German DAX 30 off 0.44%; the Dow was 0.11% down at 27,660.3 points.

After having been weaker for much of the day, the rand turned positive in late trade. At 5.52pm it had added 0.15% to 14.9261/$, 0.14% to 16.4339/€ and 0.21% to 19.1619/£. The euro was flat at $1.1009.

Government bonds had a marginally firmer bias, with the R2030 last bid at 9.14% from 9.155% previously.

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