JSE gains while rand languishes

The JSE closed in positive territory on Friday, capping its best week in 12 as global markets cheered more good news in the US-China trade war.

China’s foreign ministry said on Friday that negotiators are maintaining “effective communication” ahead of talks in September, Reuters reports. China said on Thursday that the US should cancel its latest tariffs on $250bn worth of Chinese imports to avoid an escalation of the dispute.

The rand was the third-worst performing emerging-market currency in August, behind the Mexican and Argentinian pesos. The latter was under more pressure on Friday after credit ratings agency S&P Global Ratings cut the country’s debt to selective default, after its government said it would delay $7bn of payments on short-term bonds.

Shortly after the JSE closed, the rand had firmed 0.71% to R15.2182/$, 1.27% to R16.7321/€, and 0.76% to R18.5335/£. The euro had weakened 0.56% to $1.10995. But despite Friday’s gain, August was the rand’s worst month since February, with pressure from the US-China trade dispute, global-recession jitters and concern about Eskom. By early evening on Friday, it was down about 6% for the month.

Gold was up 0.13% to $1,529.39/oz and platinum 1.95% to $937.09. Brent crude fell 3.81% to $58.63 a barrel.

The Dow was up 1.11% to 26,324.33 points, while in Europe, the FTSE 100 had added 0.37%, France’s CAC 40 0.62%, and Germany’s DAX 30 0.94%.

Earlier, the Shanghai Composite fell 0.16%, Hong Kong’s Hang Seng was flat and Japan’s Nikkei 225 rose 1.19%.

The JSE all share gained 1.56% to 55,259.60 points, with the top 40 posting similar gains. Banks climbed 3.63% and platinum miners 2.68%.

Discovery leapt 6.64% to R115.17 despite saying on Friday its diluted normalised headline earnings per share are expected to fall 5%-10% to R7.95-R7.53 in the year to end-June. It was still down 12.95% in August after the signing of the National Health Insurance Act into law. The share is down about 27% so far in 2019.

Balwin Properties rose 4.09% to R2.80 after saying on Friday its revenue growth is expected to increase about 18% for the six months to endAugust. Tower Property Fund gained 0.9% to R5.60, despite saying on Friday that its headline earnings fell 26% to R197m in the year to end-May.

African Rainbow Minerals rose 3.11% to R165.71 after saying on Friday its headline earnings rose 9% to R5.2bn in the year to end-June.

SA had a R2.88bn trade deficit in July from a revised surplus of R5.5bn in June. Consensus among economists was for a surplus of R2.9bn, according to a Bloomberg poll.

Statistics SA releases second-quarter GDP on Tuesday. Economists expect expansion of at least 2.5%, after a 3.2% contraction in the first quarter.