JSE and rand gain some ground
THE JSE and rand were substantially firmer on Tuesday as global markets and currencies stabilised after a major sell-off caused by the decision by Britons late last week to exit the EU.
Investors bought riskier assets, at bargain prices, after they lost substantial value following the Brexit vote as market participants rushed into safehaven assets such as gold and the dollar. The wave of asset selling on Brexit had wiped about $3-trillion from global stock markets in two days, Dow Jones Newswires said.
Market sentiment turned positive after European Council president Donald Tusk said on Tuesday at a gathering of EU leaders in Brussels that the twoyear divorce process could only commence with a formal notification from the UK itself. The EU needed to be patient with the UK, he said.
This was reinforced by UK Prime Minister David Cameron saying the UK wanted a “friendly” divorce.
The JSE all share had closed 2.11% higher at 51,114.10 points and the bluechip top 40 added 2.18%. Banks led the rebound, gaining 2.96% with general retailers adding 2.92%. The South African listed property index firmed 2.62% and financials added 2.80%. The gold index shed 2.91%.
Denker Capital portfolio manager Kokkie Kooyman said crises like Brexit usually had less effect on company earnings than most thought.
Among individual shares AngloGold Ashanti (ANG) dropped 2.81% to R262.07 and Harmony Gold (HAR) shed 5.73% to R51.21.
Luxury goods group Richemont (CFR) was up 2.98% to R86.72, with logistics group Imperial Holdings (IPL) climbing 5.56% to R144.12. Among banks Barclays Africa (BGA) added 3.77% to R144.40. Investec Plc (INP) rebounded 5.07% to R89.81.
Old Mutual (OML) was 3.43% higher at R37.65, Discovery Holdings (DSY) rose 3.04% to R117.21 and Sanlam (SLM) firmed 2.71% to R58.75. Among retailers Mr Price (MPC) rose 3.76% to R199.23, while The Foschini Group (TFG) leapt 6.44% to R134.12.
Those property stocks punished by the market for their UK ties in the wake of the Brexit also made a recovery, with Capital & Counties (CCO) firming 3.45% to R57, while Intu Properties (ITU) rose 3.43% to R53.40.
The rand was firmer against the dollar as emerging market currencies gained on a softer dollar. At 5.42pm‚ the rand was at R15.2395/$ from R15.4440/$ at the previous close.
Bonds also continued on a firmer path. At 5.43pm the R186 was bid at 8.910% and offered at 8.895% after a previous close of 9.110%. South African futures made good gains in line with local and global markets. At 5.45pm, the local near-dated Alsi futures market was 1.80% higher at 45,255 points. With Madeleine van Niekerk)