JSE lower as retailers slide

AFTER a strong opening yesterday, the JSE closed lower as disappointing results from BHP Billiton and Shoprite dragged resources and retailers down.

Global markets were firmer as economic data continued to point to no early hiking of interest rates in the US. The easing of geopolitical tensions in Ukraine was also equity market friendly.

At the JSE’s close the Dow Industrial was up 0.34% with the FTSE 100 gaining 0.53%.

The JSE all share index was down 0.40% to 51‚363.37 points at the close‚ with the blue-chip top 40 index losing 0.49%. All indices‚ barring resources‚ were firmer‚ led by platinum up 0.60% and banks firming 0.51%. Industrials gained 0.39% and financials 0.24%. Resources lost 2.62%.

A positive opening soon turned negative as retailer Shoprite (SHP) presented its annual results‚ which showed headline earnings per share only up 3.3%. Although the share price at one stage was nearly 7% down‚ it closed 5.60% lower at R145.50.

Market analyst Drikus Combrinck said at a price: earnings ratio of 20, Shoprite was expensive. He ascribed the worse performance of the day to the broader economy.

BHP Billiton’s (BIL) annual results soon thereafter failed to lift the market mood after the global mining group reported underlying profit up 10%. It closed 5.45% off at R347.56.

IG market analyst Shaun Murison said BHP Billiton fell short of expectations. Revenue at $67.2bn missed estimates of $67.9bn‚ while underlying profit of $13.4bn was marginally short of consensus at $13.6bn.

Shoprite’s disappointing results led to a wider sell-off among retailers, with Woolies (WHL) losing 3.05% to R77.05 and Massmart (MSM) closing 1.62% lower at R146.63.

In tandem with BHP Billiton fellow resources were also shunned, with Glencore (GLN) down 1.87% to R63.63 and Anglo American (AGL) softening 1.49% to R280.30.

Sasol (SOL) bucked the trend, firming 0.61% to R622.68 on predictions that the rand was set to weaken, offsetting the lower oil price.

Capitec (CPI) was the shining light in the banking sector, firming 2.76% to R216. The market took a more positive view on the group, despite the degrading by Moody’s on Monday.

MTN (MTN) closed 1.41% up at R244.40, a new record.

Among industrials Bidvest (BVT) firmed 1.01% to R292.75. Remgro (REM) closed marginally under previous record levels, firming 0.41% to R241.20. Staff Writer