JSE closes flat as budget speech looms

THE JSE closed flat yesterday ahead of today’s budget speech by Finance Minister Pravin Gordhan as the market took a wait-and-see approach.

Banks were weaker but food and drug retailers jumped, with Shoprite and Steinhoff still gaining after their planned merger was called off.

Both shares‚ however‚ pared gains toward the close.

Gordhan is expected to deliver another budget in the tradition of fiscal consolidation‚ keeping the budget deficit at 3.1% of GDP.

Analysts said global market developments were more likely to drive the JSE than the budget speech.

The JSE closed 0.05% higher at 52 586.60 points and the blue-chip top 40 added 0.11%. Food and drug retailers gained 1.16% while banks lost 1.13%. Resources added 0.46%. The gold index gave up 0.69% and financials 0.23%.

The bullish bias in US markets remains intact with the Dow up soon after the JSE’s close. European markets were mixed with the FTSE 100 shedding and Germany’s Dax up.

After firming in early-morning trade, Anglo American closed 0.42% lower at R219.95 with analysts saying most of the good news from its annual results was already reflected in its price.

The group said it had reduced net debt by 34% to $8.5-billion (R1.1-trillion) in the year to end-December‚ well below its $10-billion (R1.3-trillion) target. BHP Billiton rose 1.03% to R229.06. The global miner swung into profit in the interim period to end-December.

Transport and logistics group Imperial was 2.82% lower at R176.

Headline earnings per share for the first half to December fell 15% to R6.82 on foreign-exchange losses and higher finance costs.

AngloGold Ashanti closed 0.48% lower at R165.04. It said interim adjusted headline earnings rose to $143-million (R1.8-billion) from $49-million (R641-million) in 2015.

Sibanye fell 1.65% to R27.98 and Gold Fields 0.71% to R42.20.

FirstRand dropped 2.62% to R50.18 and Barclays Africa 0.66% to R160.27.

Sasfin closed 10.27% lower at R66.40. It said interim headline earnings per share to December were expected to be 17% to 21% lower than previously.

Shoprite closed 3.52% higher at R194.62‚ supported by strong interim results to December.

It reported diluted headline earnings per share rising 15.5% to 460c.

The interim dividend declared was 15.4% higher than the previous one‚ at 180c per share. Steinhoff added 2.7% to R72. In property, Hammerson was 0.72% weaker at R95.41. It reported strong annual results on Monday with the dividend increasing 7.6%.