Rand woes continue, JSE at record highs

SOUTH African financial markets had mixed performances last week.

Rand hedgers like Naspers, at R3 164.69 at the close of JSE on Friday, and resources stock had a rally, helping lift the all share index to new record levels. The JSE had four days of strong growth.

A weaker rand as well as the continuous record levels on Wall Street boosted share prices locally.

On Wall Street, the Dow Industrial index reached a record level of 22 775 points at the close on Thursday. This was 24.6 percent higher than a year ago and 15.24 percent up since the beginning of the year.

The broader Standard & Poor’s 500 also hit a record high of 2 553 points on Thursday and is now 14 percent higher than the beginning of the year.

Favourable manufacturing data early last week increased the bullish sentiment. The spike in US wages in September sent the dollar to a two-month high owing to an increased chance for a US interest rate hike. Together with this bearish sentiment for shares, a flare up of tensions on the Korean peninsula had a negative effect on risk assets last Friday and stocks around the world dwindled.

The rand continued to deteriorate against the dollar and the euro. The currency lost 20c against the dollar last week and traded at R13.73 at the close of the JSE on Friday. Against the euro, the rand weakened to R16.08, or 0.7 percent, softer than a week ago. The currency, however, managed to appreciate against the pound trading at R17.9424. It was at R18.13 the previous Friday.

On the JSE, the all share index ended the week on a new high of 57 232 points. This was 1 652 points, or 3 percent higher than the close of the previous week, and 13 percent higher than the beginning of the year.

The resources 20 index had increased by 4.6 percent last week, while the industrial index had gained 3.2 percent. Despite the much weaker rand, the financial index increased by almost 1 percent. Listed property also surprised, gaining 0.6 percent.

This week investors will await inflation data from most developed countries. Locally, Stats SA will release the latest manufacturing and mining production figures.