JSE higher despite US policy changes

SOUTH African and global financial markets were volatile and uncertain last week as the first policy documents were signed by US President Donald Trump.

The US’ trade war against Mexico as well as the the proposed pipeline production in the US drew the most attention.

Lower company tax proposals by the Republicans also boosted US share prices and all three main share indices, namely the Dow Jones industrial average, the Standard

& Poor’s 500 and the Nasdaq,

all reached record levels.

However, the news on Friday that the US economic growth slowed to 1.9 percent during the fourth quarter of last year, against the 3.5 percent recorded for the third quarter, contributed to financial markets weakening at the close.

Share prices on the JSE ended the week stronger. The all share index traded higher by 442 points or 0.8 percent for the week. The index is now already up by 4.6 percent since the beginning of the year.

Financial shares increased by 0.1 percent, while the industrial sector gained 0.6 percent. The resource 20 index continued its rally and ended the week 1.9 percent higher. This index has already increased by 10.5 percent since the end of last year.

The property share index was flat, gaining a slight 0.2 percent, and the R186 bond increased by 10 points or 1.15 percent.

The rand exchange rate once again move sideways against the dollar and the euro during the week. Although the rand at one stage traded at levels close to R13.20 to the greenback, it lost steam on Friday and ended the week on R13.46, marginally stronger than the previous Friday’s level of R13.52. The unit was at R14.42 against the euro, the same level as the previous Friday.

The pound recovered against the most currencies last week and ended on R16.87 on Friday against R16.62 the previous Friday.

This week

Investor’s attention will be on the US’ job data for January. Of importance will be the unemployment rate and the hourly wage earnings. For South Africa, the total vehicle sales figures and the money supply and credit financing data for January will be of importance.