JSE starts week flat as market eyes Gigaba’s budget policy

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The JSE opened flat at the star of a week that promises a number of market-moving events, including Wednesday’s medium-term budget policy statement.

Finance Minister Malusi Gigabe is likely to present a disappointing budget, reflecting an increased deficit with subdued economic growth prospects.

Political issues are also expected to remain at the forefront. Speculation that Deputy President Cyril Ramaphosa is about to be fired has been denied by President Jacob Zuma’s office as “gossip”.

Rand weakens significantly

The rand was slightly weaker on Monday, at R13.7236 to the dollar from R13.6802.

Globally, markets are alert to the appointment of a new US Federal Reserve chairman as markets rallied last week on the possible implementation of President Donald Trump’s tax reform plans.

Despite intense speculation about the next Fed chairman, the path of policy rates was likely to be driven primarily by data, regardless of who was nominated, Barclays Research analysts said.

The European Central Bank (ECB) is expected to announce a reduced commitment to its stimulus policies later in the week.

“We expect the ECB to announce a longer nine-month extension of the assest purchase programme, but a slower pace of €30bn a month, “Barclays said.

However, Barclays cautioned that lots of events in the week ahead would mean a few policy surprises.

Chinese markets were mixed and not expecting any sudden shift amid the ongoing Communist Party Congress. The Hang Seng dropped 0.58% and the Shangai Composite added 0.06%.

The Nikkei was strongly up by 1.11% following the electoral victory of Japanese Prime Minister Shinzo Abe’s party on Sunday. “The victory will maintain Japan’s ultra-easy monetary policy for the foreseeable future,” analysts at FxPro said.

Rand on firmer footing

The Dow Jones industrial average closed 0.71% higher at yet another record of 23,328.63 on Friday.

At 9.30am the JSE all share was 0.02% up at 57,961.10 and the blue-chip top 40 rose 0.15%. Banks added 0.51%, general retailers 0.18%, financials 0.15% and resources 0.12%.

The platinum index shed 1.77% and the gold index 1.04%.

Glencore was up 0.92% at R69.27 and Anglo American rose 0.77% to R257.82.

Arcelor Mittal shed 3.39% to R5.70.

AngloGold Ashanti dropped 0.70% to R128.10 following its announcement last week that meant it had reduced its presence in the South African Market.

Nedbank rose 0.93% to R216.28, Barclays Africa 0.89% to R142.19 and Standard Bank 0.76% to R167.77.

Woolworths gained 0.68% to R57.65.

Among property stocks Resilient rose 0.73% to R141.50.

Naspers softened 0.28% to R3, 287.83.

Pioneer Foods was down 2.36% to R115.20 on a disappointing trading update. Pioneer said it expected to report on November 20 that its headline earning per share (HEPS) would fall between R3.98 and R4.70 fro the previous years’ R9.04.

Mediclinic lost 0.67% to R115 after announcing it was considering a hostile takeover of its UK associate, Spire Healthcare Group.

Taste Holdings jumped 6.25% to 85c.

by Maarten Mittner -BusinessLIVE

 

 

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