US-China trade-war truce offers hope to JSE stocks

Sasol and Naspers were the biggest beneficiaries of the JSE’s rally on Monday, with their combined market value jumping R72bn — more than Aspen’s current valuation — as hopes of a truce in the trade dispute between China and the US lifted stock markets across the world.

The prospect of detente between the US and China sent commodities surging, with a 5% rise in the oil price boosting Sasol, the sixth most valuable company in the local bourse, by 6.82% to R434, its biggest jump since January 2016.

Naspers, Africa’s most valuable public company, jumped 4.54% to close at R2,888.51 a share, after losing 2.02% on Friday when it released interim results that fell short of forecasts.

In currency markets, the rand gained 1.2% to R13.7038/$, adding to a jump of almost 7% in November, which was the biggest in 2018 so far. Emerging markets have also been supported by speculation that the Federal Reserve will slow the pace of US rate increases.

The prospects of a full-blown trade war between China and the US that would slow the global economy has been one of the biggest drags on emerging-market assets in 2018.

The rand dropped 1.5% on Friday, ahead of the G-20 meeting in Argentina, and the rally reflected relief that the gathering did not end with an escalation in the China-US dispute.

Naspers, which accounts for about a fifth of the all share index, tracked gains in its main asset, Chinese internet behemoth Tencent, in which it holds a 31.2% stake. That share closed 4.1% up in Hong Kong.