Industrials calm JSE after rough week

THE JSE ended a volatile week on a firmer note on Friday as industrials lifted the All Share index to a positive close.

The All Share closed 1.29% higher at 51 146.80, and the bluechip Top 40 index added 1.48%.

The industrial index closed 1.89% up, with Naspers jumping 4.7% to R2 294.99 as Chinese inflationary data came in higher than expected, allaying the Chinese growth concerns earlier in the week about lower trade data.

Investors took the view that Naspers’s 34% investment in Chinese internet group Tencent benefit Naspers, even though it is trading at a p:e of 99.

The All Share lost 1% over the week after dropping sharply by 2.04% on Thursday. It is still marginally up for the year at a positive 0.89%. But the mood remains cautious.

The banking index lost 6.2% in the week on continued uncertainty about the future of Finance Minister Pravin Gordhan. Financials lost 3.6%.

The property index shed 2.2%, and general retailers lost 1.87%.

The market remains at the mercy of political factors. Any indication that Gordhan will be removed as minister would be likely to send sectors with a sizeable foreign shareholding into a tailspin.

Altogether 40% of investors in local banks are based offshore, with property stocks also sporting large foreign interests.

Whatever will happen on the political front, it is clear the All Share has not benefited from more positive emerging-market sentiment so far this year.

Analysts emphasise that the high local political temperature needs to be lowered for greater confidence to return to the market.