JSE stages a minor rebound on the back of roaring Tiger Brands

The JSE staged a modest comeback yesterday after struggling for direction most of the day, led by industrials and precious metals.

Tiger Brands was the star performer, gaining 10.4% to R177.81 — the most since 2000

— after announcing that earnings for the year to endSeptember are expected to rise by as much as 45%, despite recently recalling its baby powder products on fears they may be contaminated by traces of asbestos.

The company said the recall was expected to incur a one-off cost of R20m-R25m.

The relief may be shortlived, however, as global markets are under pressure after the UK’s mini budget — in which it announced big tax cuts — failed to impress investors, taking the pound to an all-time low against the dollar.

That has sparked concern the Bank of England may step in to defend the beleaguered currency.

“Economic fears are still prevalent in the markets, with the UK taking a particular drubbing as the pound hit a record low against the dollar,” said Oanda senior market analyst Craig Erlam.

“Friday’s mini-budget has gone down like a lead balloon, and serious questions are already being asked about the economic competence of the new government.

“Markets are factoring in a strong chance of a substantial emergency rate hike from the Bank of England to shore up the currency and confidence in the markets,” Erlam added.

The Bank of England said it was monitoring developments “very closely”.

The JSE all share ended the session 0.33% firmer at 63,625.55 points and the top 40 gained 0.32%. The rand weakened below R18 to the dollar as investors continued to rush to the relative perceived safe haven of the greenback.

Investors continue to fret over prospects of global recession as policymakers commit to continue raising interest rates to keep inflation under control despite the associated recessionary risks.