JSE closes firmer after Reserve Bank decision

THE JSE closed firmer yesterday as the Reserve Bank kept the repo rate unchanged and the platinum price caught up with the surge in platinum shares of the past two sessions.

The rand firmed more than 1% to a six-month high against the dollar after the bank’s news‚ supporting retailers. Rand hedges came under pressure. Banks and financials took a hit on firming of expectations of a repo rate cut‚ but that is not expected soon.

PPS Investments analyst David Crosoer said: “The market possibly got ahead of itself in arguing that the interest rate cycle had peaked‚ given that inflation remains stubbornly high and the US is expected to hike rates at least three times this year.”

Nedbank Corporate and Investment Banking (CIB) analysts said uncertainty about the Trump administration was still gripping markets‚ forcing safe-haven buying of gold‚ and weakening the dollar as well.

“How far Trump will go to limit Chinese imports into the country is yet to be seen, with Trump previously promising a 45% tariff on Chinese imports.”

The all-share closed 0.57% higher at 53 342 points with the blue-chip Top 40 adding 0.49%. General retailers were up 1.32%‚ and banks shed 0.52%.

Stanlib retail investment director Paul Hansen said the dollar was still the main market driver to watch.

“A stronger dollar is negative for the US economy‚ but a weaker dollar is overall good for us as it leads to a stronger rand.”

Hansen said the all-share was trading at a forward annual price:earnings ratio of 14.2‚ below the long-term average of 14.6.

“That means the market is cheaper now and there is some decent value in the JSE.” The all-share and resources index could deliver double-digit growth this year‚ Hansen said.

Anglo American jumped 3.01% to R230.10 and BHP Billiton 2.23% to R249.42.

Rand hedge Anheuser-Busch InBev dropped 1.66% to R1 411.50 and Richemont 1.04% to R102.59.

Sibanye Gold jumped 5.38% to R30.55. Impala Platinum rocketed 7.84% to R55 and Anglo American Platinum 5.54% to R357.51.

Woolworths added 1.64% to R74.50 and Clicks 1.69% to R120.37 and Massmart 3.2% to R134.57. – TMG Digital/ BusinessLIVE