JSE perks up after four tough days

The JSE had its first day of gains in five as the rand firmed, brushing off coronavirus worries, and investors cheered government plans to cut spending.

The rand reversed course after finance minister Tito Mboweni gave his budget speech on Wednesday, announcing a R160.2bn cut in the state wage bill over the next three years.

“The content of the speech exceeded our expectations,” said Anchor Capital fund manager Nolan Wapenaar. “We would like to have seen more detail on Eskom and SAA, and presume that tough discussions are still under way at this stage. The economy suffers from a number of pressure points. The budget can only do so much, and that was achieved. The strong defence of the independence of the central bank will also reassure markets.”

At 5.20pm, the rand had strengthened 0.69% to R15.1159/$, 0.81% to R16.4177/$ and 1.15% to R19.5327/£. The euro weakened 0.17% to $1.0862.

“If you had a look at the price action prebudget, the market had a fair amount of negative news priced in,” said Rand Merchant Bank fixedincome analyst Michelle Wohlberg.

“I think the market was pleasantly surprised with today’s budget, and it shows commitment from government to turn this ship around.”

Gold lost 0.13% to $1,632.39/oz and platinum 1.58% to $909.62. Brent crude was down 0.42% to $54.75 a barrel.

A surge in coronavirus cases outside China continued to cast a shadow over global equities. Reuters reports that the first case was confirmed in

Brazil on Wednesday, while the virus has also spread to Italy, South Korea and Iran.

Shortly after the JSE closed, the Dow was up 1.17% at 27,397.07 points. In Europe, the FTSE 100 was down 0.83%, France’s CAC 0.45% and Germany’s DAX 0.61%.

Earlier, the Shanghai Composite fell 0.83%, Hong Kong’s Hang Seng 0.73% and Japan’s Nikkei 225 0.79%.

The JSE all share gained 0.43% to 55,047.20 points and the top 40 0.40%. Banks surged 6.21%, the biggest oneday rise in two years. General retailers recorded their biggest gain in four months, up 4.80%.

Automotive group Motus reported headline earnings per share of 517c in the six months ended December, which is an increase of 9%. Its share price, however, fell 1.29% to R77.