Bourse hits record in intraday trade

The JSE all share traded above the record 60,000point level on Monday before closing marginally lower.

The JSE all share traded above the record 60,000-point level on Monday before closing marginally lower as miners led early gains while banks recovered strongly after the rand regained some lost ground.

If trends continue, the all share is set to end 2017 with its biggest one-year gain since 2012, when the index added 22.71%. It is up 18.4% in 2017.

An important lesson from 2017 was that returns were lumpy, said Old Mutual MultiManagers analyst Dave Mohr.

“While the JSE all share is up strongly for the year, February (-3.1%), May (-0.4%), June (-3.6%) and September (-1.67%) were negative months,” he said.

The strong local equity returns so far in 2017 have come entirely from large caps, the big global companies on the JSE — including Naspers, Richemont, British American Tobacco and Anglo American.

The top 40 index has returned 22% in 2017, but the small-cap index is down 2.8% and the mid-cap has shed 2.2%. Naspers is up 75.8% since January, while the dollar has gained just more than 3% against the rand in 2017.

In September and October, dollar gains exceeded 4%, while the rand recovered strongly in April, May, June and August.

Richemont is up 43.6% in 2017, British American Tobacco has risen 18.6% and Anglo American 43.7%.

Monday’s gains came on firmer oil prices, with Brent crude having leapt 2.9% to $63.87 a barrel by 7pm local time, while other commodities were mixed. Brent is up more than 12% in 2017, having gained 51.3% in 2016.

Although the weaker rand may boost miners in the short term, a drop in oil prices is bound to damp further gains.

“Oil prices are currently approaching the higher end of the trading range for the rest of the year, and we will be looking for a mean reversion towards or below $60 in the weeks to come,” said FXTM analyst Hussein Sayed.