Another (almost) record breaking day on the JSE

SOUTH Africa’s stock market reached unprecedented highs yesterday after the Johannesburg Stock Exchange’s (JSE) all share index briefly flirted with an all-time high of 58 321 points with gold stocks leading the surge at 3.7 percent and resources inching up 1.6 percent.

The uptick raised the index by 2.4 percent in a month and a massive 11 percent on a 90-day basis. The benchmark top 40 index also rose 0.7 percent to 51 838 points.

Old Mutual Multi-Managers investment strategist Izak Odendaal yesterday said that the rally was in line with global markets rising this year accelerated growth coinciding with low inflation.

“Not only can companies grow their revenues and profits strongly in such an environment, but it also means that interest rates should remain low, supporting the current valuations,” Odendaal said.

“The JSE All Share has historically followed global markets, and one would only expect this correlation to increase. The largest companies on the JSE are global players, while many domestically-focused listed companies are branching out abroad in search of better growth.”

African Rainbow Mineral did most of the heavy lifting in the mining sector after its share price surged 4 percent on the day, with Sibanye stock 1.9 percent stronger and Harmony share price 1.2 percent richer.

Metal prices also rallied on the positive outlook for global growth with iron ore and palladium prices reaching new heights, proving a boon for resources shares on the JSE.

Kumba added 1.8 percent lifting Exxaro, which owns 20 percent in the company, up 2.5 percent and Anglo American 1.3 percent.

The resurgent iron ore price was aided by Friday’s Chinese data that showed that imports had risen above 100 million tons in September, smashing the previous high set in 2015.

China’s iron ore imports constitute more than 70 percent of the global seaborne trade.

Macroeconomics statistics website Trading Economics said the local stocks reached an all-time high of 58 321.37 yesterday following a record low of 26 738.91 in August of 2010.

Last week, a research report by National Treasury showed that retirement funds owned 24 percent of shares in JSElisted companies.

The report said the largest single shareholder on the JSE remained the Government Employees Pension Fund which holds 11 percent of the top 25 listed companies on the local bourse. Other local institutional investors and investment managers owned a further 24 percent. However, foreign investors own a mammoth 38 percent.

The JSE has put black economic empowerment-direct ownership at 10 percent, with a further 13 percent in indirect ownership.