Bourse inches back as rand firms
The JSE pushed lower in choppy trade on Monday, coming under pressure after the rand surprised many analysts, strengthening to a five-week high to the greenback.
After opening weaker, banks and retailers ended the day firmer, with the former earlier reacting to news that S&P Global had downgraded SA’s local currency rating, as Moody’s left its rating unchanged, but on review.
The government’s medium-term budget policy statement seems to have been one of the triggers for this further downgrade as it essentially abandoned the policy of fiscal consolidation, Old Mutual Investment head Andrew Davison said.
This portrayed a deterioration in the deficit and debt ratios, yet indicated no cohesive plan to stabilise the government’s finances, Davison said.
The Presidency instructed Finance Minister Malusi Gigaba on Monday to move to deal with concerns about the budget, and ensure that funds are found for a proposed R40bn plan to finance higher education, through a combination of expenditure cuts and increased revenue.
Analysts also pointed to increased prospects of a victory for Deputy President Cyril Ramaphosa in December’s ANC elective conference as a reason for rand strength.
The all share closed 0.28% lower at 60‚157.6 points and the blue-chip top 40 dropped 0.35%.
Resources lost 2.13%‚ the platinum index 1.98%‚ the gold index 1.3% and food and drug retailers 0.31%. Banks rose 1.79%‚ financials 0.81%‚ general retailers 0.66% and property 0.39%.
Anglo American closed 2.73% lower at R263.68.
Richemont ended the day 1.9% lower at R121.15 and British American Tobacco 1.26% at R918.28.
Sibanye was 2.42% down at R18.94 and Impala Platinum 2.76% at R43.76.
Standard Bank jumped 2.32% to R172.20 and Barclays Africa 2.19% to R154.61.
Steinhoff shed 2.52% to R54.48 and Spar 1.18% to R183.75. Woolworths gained 1.44% to R58.40.
Vukile Property Fund gained 2.75% to R20.15.
Naspers rose 0.87% to R3‚793.84, while Sappi dropped 2.94% to R99.75.
After the JSE closed‚ the Dow was up 0.19%. In Europe‚ the CAC 40 was off 0.34% and the DAX 30 0.14%.