Rand hedges, miners gain on JSE

The JSE maintained its weekly gain even after tracking international counterparts lower on Friday, having earlier received a boost from a weaker rand that benefits companies with overseas sales.

The rand’s slump to record lows boosted JSE miners and other rand hedges.

The JSE all share lost 1.03% to 44,598.7 points on Friday and the top 40 fell 0.90%. Banks, which have suffered from the negative sentiment resulting from the virtual closure of the economy and downgrades by Moody’s Investors Service and Fitch Ratings, dropped 2.79%.

For the week, however, the all share gained 3.85%, while resources were up 5.20% and industrials 4.11%.

Rand hedge British American Tobacco leapt 22.37% this week, Anheuser-Busch InBev gained 8.02% and Naspers was 4.19% higher.

Among the larger diversified miners BHP stood out, rising 10.74% in the week.

The all share has now lost nearly 22% in 2020.

Comments on Thursday by US President Donald Trump that Saudi Arabia and Russia would cut oil output were not enough to sustain a rally in stocks. Bourses in major markets trended lower as US jobs data came out worse than forecast, with the unemployment rate having jumped by the middle of March, before stringent orders for people to stay at home, to the highest in more than two years.

That pushed the S&P 500 down more than 2% in early afternoon trade in New York. European stocks also fell as key gauges of economic activity crashed throughout the region, reflecting the effect of stringent lockdowns in an attempt to contain the coronavirus.

The rand had another miserable day, extending losses above R19/$ after Fitch Ratings said it had downgraded the country by another notch below investment grade.

By 8pm, the rand had weakened 3.04% to R19,0526/$, down 7.26% for the week and 19.14% over the past month, according to Infront data.

“As the country approaches the halfway mark of its 21-day economic lockdown, the markets will continue to focus on international events, with renewed worries over the length and severity of the pandemic seeing some further elevation in global risk aversion recently,” said Investec economist Lara Hodes.