French polls, growth prospects lift shares

THE POSITIVE outcome of the first round of French elections boosted share prices all around the world last week.

Expectations that President Donald Trump will cut personal and company taxes as well as positive market sentiment on economic growth for most developed economies, also helped drive share prices higher across the globe.

A weaker rand also boosted share prices on the JSE as rand hedge stocks continued to increase.

News that South Africa recorded a trade surplus of R11.4 billion during March also boosted sentiment on share markets, but did not help strengthen the rand. The currency awaits the grading from Moody’s as well as fear that South African bonds may be removed from the emerging market bond index.

On the JSE, the all share index gained 1 623 points, or more than 3.1 percent last week, as rand hedge stocks and especially industrial shares were the favourites. The Industrial board gained 5.1 percent, while the financial index traded 3.1 percent higher.

The share market (all share index) gained 3.4 percent for the month of April and is now 6.2 percent higher for the year to date.

On the bond market, the all bond index, in correlation with a softer rand, moved weaker.

The index has now lost 1.3 percent since March 30, the day before President Jacob Zuma reshuffled his cabinet.

Property managed to recover last week as the listed property index traded 2.3 percent. The index is, however, still 0.1 percent lower since the beginning of the year.

The rand moved much weaker last week on fears of further negative grading’s by the grading agencies.

The currency lost 18c, or 1.4 percent against the dollar and on Friday traded at R13.34 to the dollar just after the close of the JSE.

Against the pound, the currency lost 2.7 percent for the week at R17.23, and against the euro, the rand depreciated by 47c, or 3.3 percent, and traded at R14.54. This Week All eyes will be on the release of US’s April jobs data, economic growth rate of the EU for the first quarter, and interest rate decisions by Australia and the US.

On the domestic front, South Africa’s latest new motor vehicle sales and its manufacturing purchasing managers indices, will be announced.