JSE all­share on a record high

Breach­ing 55 000 points

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

THE JSE all share in­dex yes­ter­day rose to new highs from an un­der­whelm­ing per­for­mance in June to end July on a high, breach­ing the 55 000 point mark for the first time on the back of strong sup­port from fi­nan­cials, re­sources and in­dus­trial stocks, which en­joyed a stel­lar month.

The all share in­dex surged 0.59 per­cent to 55 207 from a pre­vi­ous close of 54 287, while the top 40 in­dex rose 0.66 per­cent to 48 873. The gains were led by Build­max, which shot up 26.6 per­cent on the day and African Dawn Cap­i­tal, which rose 11.4 per­cent.

Dave Mohr, a chief in­vest­ment strate­gist at Old Mu­tual, said the all share in­dex de­liv­ered the 9 per­cent rise since the be­gin­ning of the year, buoyed by firmer com­mod­ity prices, and good re­sults from An­glo Amer­i­can, which will pay a div­i­dend six month ear­lier than ex­pected.

Mohr said the JSE’s re­sources in­dex re­turned more than 10 per­cent this month, push­ing year-to-date re­turns into pos­i­tive ter­ri­tory. “Fi­nan­cials and industrials indices have each gained around 5 per­cent this month,” Mohr said

“Over 12 months, the all share re­turn is only 5 per­cent, but any one-year com­par­i­son is very depen­dent on the start date. Be­cause the Alsi sold off in the sec­ond half of last year, one-year re­turns will rise to around 10 per­cent by De­cem­ber if the in­dex re­mains flat for the re­main­der of the year.”

The all share in­dex first showed the signs of inch­ing to­wards the 55 0000 mark last week, ris­ing 0.6 per­cent to 54 836 points on Tues­day.

John Ash­bourne, an econ­o­mist at Cap­i­tal Eco­nom­ics, said that eq­uity mar­kets across Africa per­formed well in July with the JSE third be­hind Ghana and Nigeria. “Ghana’s mar­ket was the re­gion’s best per­form­ing in lo­cal cur­rency terms with Ghana’s com­pos­ite in­dex jump­ing by 15 per­cent over the past month,” he said. “Nigeria’s all-share fol­lowed close be­hind, gain­ing 11 per­cent in the month.”

Ash­bourne said the JSE could have risen more if gains by fi­nan­cials and industrials were not partly off­set by the poor per­for­mance of min­ing firms, which had a tor­rid time last month.

The min­ing sec­tor be­gan last month on the back foot of the re­vised Min­ing Char­ter an­nounced by Min­eral Re­sources Min­is­ter Mosebenzi Zwane in June.

The an­nounce­ment saw min­ing stocks shed­ding R50 bil­lion value on the JSE while the min­ing in­dex dragged to a 13 month low.

Zwane has since sus­pended the im­ple­men­ta­tion of the char­ter pend­ing a judg­ment in an ur­gent in­ter­dict ap­pli­ca­tion by the Cham­ber of Mines.

Afrifo­cus Se­cu­ri­ties said in its weekly mar­ket re­port that min­ing and re­sources stocks had made sub­stan­tial gains in the past week.

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