JSE allshare on a record high

Breaching 55 000 points

THE JSE all share index yesterday rose to new highs from an underwhelming performance in June to end July on a high, breaching the 55 000 point mark for the first time on the back of strong support from financials, resources and industrial stocks, which enjoyed a stellar month.

The all share index surged 0.59 percent to 55 207 from a previous close of 54 287, while the top 40 index rose 0.66 percent to 48 873. The gains were led by Buildmax, which shot up 26.6 percent on the day and African Dawn Capital, which rose 11.4 percent.

Dave Mohr, a chief investment strategist at Old Mutual, said the all share index delivered the 9 percent rise since the beginning of the year, buoyed by firmer commodity prices, and good results from Anglo American, which will pay a dividend six month earlier than expected.

Mohr said the JSE’s resources index returned more than 10 percent this month, pushing year-to-date returns into positive territory. “Financials and industrials indices have each gained around 5 percent this month,” Mohr said

“Over 12 months, the all share return is only 5 percent, but any one-year comparison is very dependent on the start date. Because the Alsi sold off in the second half of last year, one-year returns will rise to around 10 percent by December if the index remains flat for the remainder of the year.”

The all share index first showed the signs of inching towards the 55 0000 mark last week, rising 0.6 percent to 54 836 points on Tuesday.

John Ashbourne, an economist at Capital Economics, said that equity markets across Africa performed well in July with the JSE third behind Ghana and Nigeria. “Ghana’s market was the region’s best performing in local currency terms with Ghana’s composite index jumping by 15 percent over the past month,” he said. “Nigeria’s all-share followed close behind, gaining 11 percent in the month.”

Ashbourne said the JSE could have risen more if gains by financials and industrials were not partly offset by the poor performance of mining firms, which had a torrid time last month.

The mining sector began last month on the back foot of the revised Mining Charter announced by Mineral Resources Minister Mosebenzi Zwane in June.

The announcement saw mining stocks shedding R50 billion value on the JSE while the mining index dragged to a 13 month low.

Zwane has since suspended the implementation of the charter pending a judgment in an urgent interdict application by the Chamber of Mines.

Afrifocus Securities said in its weekly market report that mining and resources stocks had made substantial gains in the past week.