Tencent and BHP rallies could boost the JSE

The JSE is likely to open slightly higher on Wednesday thanks in part to a three-day share rally by Naspers’s associate company, Tencent, and a strong opening from BHP Group in Australia.

Tencent, the owner of the popular WeChat app, was 1.7% up at the lunch break in Hong Kong. The stock has rallied 9% so far this week, returning it to levels last seen in August 2018.

Naspers, which owns about 31% of Tencent, has gained about 3% this week, placing the stock at its best level since September 2018.

Tencent’s rally came despite a rare rating cut. The stock, which most analysts rate a buy, was downgraded by Sinolink Securities to neutral from buy, according to Bloomberg. The brokerage said consensus expectations for earnings were “overly optimistic”.

Meanwhile, another JSE heavyweight, BHP Group, was up 0.8% in Australia.

Asian stocks were mixed on Wednesday, with the Hang Seng index 0.3% higher and the Nikkei 225 lower by 0.7%. Overnight, US stocks closed marginally lower.

JSE-listed companies due to report earnings on Wednesday include Grindrod, Afrox, Murray & Roberts, and Vivo Energy.

Grindrod said in February it expected its headline earnings from continuing operations for the year ended December to be between R707m and R727m, an increase of between 24% and 27%.

On Wednesday morning, the rand was 0.07% weaker versus the dollar at R14.17/$. Against the pound, it was 0.03% weaker at R18.67£, and versus the euro it was 0.06% worse off at R16.02€.

The rand was temporarily boosted on Tuesday by SA’s better-than-expected economic growth numbers.

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