Uncertainty still hurts local stocks

The JSE gained on Friday but was negative for a third consecutive week as local stocks come to grips with economic and political uncertainty.

The Reserve Bank’s interest rate decision on Thursday is likely to be the largest single domestic factor moving equities in the coming week. The Bank is widely expected to keep rates on hold, despite a rising oil price and recent turbulence in the rand.

Reports on Friday suggested that the third iteration of the Mining Charter will be completed by Monday and will be debated in a cabinet meeting on Wednesday, ahead of its implementation. This could mean additional clarity is in the offing in the subsequent postcabinet communication.

Local inflation data on Wednesday could give direction to shares that are sensitive to interest rates, with the consumer price index expected to rise 5.1% year on year in August, according to a Bloomberg consensus forecast from 11 economists.

The all share firmed 0.74% to 56,581.9 points and the top 40 0.9%. Resources firmed 1.84% and financials 0.69%. Property stocks fell 0.81%. The all share lost 0.85% during the week.

Major corporate releases this week include Remgro and Group Five.

Remgro closed 1.2% higher at R209.88 on Friday, ahead of its results for the year to end-June on Thursday. In the prior period the group reported intrinsic net asset value per share of R251.48.

Group Five fell 5.31% to R1.07, ahead of its results for the year to end-June on Friday. The group warned in August that headline earnings per share will be 52.4%-70% lower than the prior comparative period.

Investec gained 9.8% to R103.29, after earlier saying it intended to spin off its investment management unit, which will be separately listed.

Aspen Pharmacare slumped another 17.77% to R190.83, extending the losses it sustained on Thursday when it announced the sale of its infant formula business to French multinational Lactalis.

Shortly after the JSE closed, the Dow was flat at 26,173.15 points. In Europe, the FTSE 100 had gained 0.31%, the CAC 40 0.59% and the DAX 30 0.6%. At the same time, platinum had fallen 0.4% to $801.05/oz and gold 0.38% to $1,196.98. Brent crude was 0.5% lower at $77.94 a barrel.