JSE drops despite rating upgrade

THE JSE started the week on a negative note‚ despite positive news on Friday when Moody’s upgraded its outlook on South African debt from negative to stable.

Not even the possibility of an interest-rate cut later in the week provided market support.

A sharply higher opening on the Dow‚ amid reports that US and Chinese officials had started behindthe-scenes discussions to avert a global trade war‚ supported risk-on trade towards the close‚ benefiting domestic banking and property stocks.

Although the JSE all-share has struggled this month‚ losing 3.8% to date‚ analysts say an interest rate cut might encourage investors to consider greater exposure to equities.

The all-share has battled to provide investors with positive returns this year as the firmer rand keeps the pressure on rand hedges. It is down 5.6% so far.

The historic dividend yield of the all-share has risen to 3.05%‚ while the yield of the property index is up at 7.1%‚ close to its highest in almost six years.

The all-share closed 0.41% lower at 56 176.4 points and the Top 40 dropped 0.38%.

The platinum index shed 5.3%‚ resources 1.4% and industrials 0.27%. Banks gained 0.61%‚ general retailers were up 0.35% and property gained 0.29%.

Construction group Murray & Roberts rocketed 45.54% to R14.03 after German investment group Aton said it intended to make a buyout offer at R15 per share.

Media house Naspers was down 0.63% to R3 130.