Rand’s rally good for JSE, bad for miners

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The rand has strengthened 2.3% so far this week‚ from R13.82/$ on Monday to R13.51/$ on Thursday morning.

The dollar sank against most currencies on Wednesday 8pm South African time‚ when the minutes of the US Federal Open Market Committee’s most recent meeting were released.

These showed US monetary policy decision makers divided on whether interest rates should be raised again this year or not.

The rand’s rally against the dollar was good for the JSE’s banks on Wednesday‚ with Nedbank rising 2.1% to R212.90‚ Standard Bank 2.03% to R166.26‚ Barclays Africa 1.76% to R146.02‚ Capitec 1.7% to R198 and FirstRand 0.88% to R53.70.

As usually happens when the rand strengthens‚ the JSE’s miners suffered. DRDGold fell 3.23% to R5.09‚ Gold Fields 3.08% to R55.97 and Harmony 2.95% to R24.66.

The banks helped the JSE’s all share index rise 0.24% to a fresh record 57‚771 points and the top 40 index added 0.15% to 51‚439 points.

But whether Thursday will be the JSE’s 10th consecutive day of gains is unclear‚ looking at Asian markets trading ahead of the local bourse’s opening.

Hong Kong’s Hang Seng index was up 0.26% while mainland China’s Shanghai composite index was down 0.17%.

Taste Holdings said on September 29 it expected to report on Thursday its headline loss per share for the six months to end-August to have worsened by up to 82% from the matching period’s 9c.

The group‚ which owns the South African rights to US restaurant chains Starbucks and Domino’s‚ recently said it was abandoning its plans to sell its jewellery stores‚ which include Arthur Kaplan and NWJ‚ indicating it would instead raise capital via a rights issue.

Statistics SA is scheduled to release mining production and sales figures for August at 11.30am.

Investec Bank economist Kamilla Kaplan said in her weekly note on Friday that she forecast annual mining production to have fallen 2% in August‚ ending an eight-month run of growth.

 

by Robert Laing -BusinessLIVE

 

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