JSE droops in week of mixed fortunes

THE JSE ended weaker on Friday after a fairly volatile week with a mixed bag of corporate earnings and talk of interest rates in the US rising later this month.

The All Share index settled 0.36% lower to 51 708.60 points as platinum and gold stocks lost significant ground due to low commodity prices.

Markets were caught offguard by several high-ranking US Federal Reserve officials backing the case for higher interest rates. The Fed was expected to pull the rates trigger later in the year.

“The risk is that the Fed raises expectations too high for March and doesn’t deliver, which will once again have people ques- tioning its credibility,” said Oanda senior market analyst Craig Erlam.

The dollar, which usually moves contrarily to commodity prices, was firmer on the week, hitting the gold price in particular. AngloGold was the biggest loser in the JSE Top 40, shedding 11%, followed by Implats, down 7%. The other worst performer was Steinhoff.

Banks had a good week, helped by results from Nedbank (up 6.5%) and Standard Bank (up 9.5%).

MTN Group was equally well supported after managing to keep a dividend, even as it swung to a full-year loss because of the multibillionrand regulatory fine imposed on it in Nigeria.

Apart from individual companies, the local share market battled to make headway, in contrast to the Dow Jones industrial average, which hit fresh record highs this week.

Herenya Capital Advisors, founder Petri Redelinghuys said: “Our market has been under undue pressure, especially when considering that the rest of the world, including other emerging markets, has run so incredibly hard.”

The rand and local bonds were relatively resilient despite a strong dollar with the local currency shedding 1.2% by Friday.

The biggest economic news in the new week will probably be the release of South Africa’s fourth-quarter GDP data.