MARKET WRAP: JSE closes higher ahead of expected Ramaphosa victory


The JSE all share closed higher on Monday‚ with the banking and property indices at record highs on the expected announcement that Deputy President Cyril Ramaphosa would become President Jacob Zuma’s successor.

By the market close‚ the ANC elective conference was yet to announce the outcome of the voting‚ which pitched Ramaphosa against Nkosazana Dlamini-Zuma.

The rand firmed more than 2% against the greenback as the market priced in a Ramaphosa’s victory. Stocks with a big bias toward the local economy gained substantially‚ but rand hedges dragged industrials lower. Miners were down on the stronger rand‚ despite upbeat commodity prices.

The platinum price rose 1.8% to $910.12 an ounce and gold 0.5% to $1‚261.50.

Buoyant global markets supported sentiment‚ with the Dow jumping 0.77% to another record‚ of 24‚839.66 points‚ on reports that the new US Tax Bill is moving closer to being ratified. European markets were also higher‚ with the FTSE 100 having gained 0.47% and the DAX 30 1.52%.

The all share closed 0.51% higher at 57‚707.40 and the blue-chip top 40 0.14%. Banks rose 5.21%‚ general retailers 4.09%‚ financials 3.49% and property 1.83%. Resources shed 0.93%‚ the gold index 0.45% and industrials 0.37%.

Rand hedge Richemont gave up 2.38% to R116.32‚ Anheuser-Busch InBev 1.53% to R1‚444‚ and British American Tobacco 1.51% to R857.46.

Naspers fell 2.11% to R3‚240.

Steinhoff International gained 5.6% to R8.48‚ ahead of a crucial meeting with lenders on Tuesday. The embattled global retail giant is seeking extra time to repay more than €1bn it owes on a revolving credit facility.

FirstRand jumped 6.93% to R59.89‚ Barclays Africa 5.97% to R171.50 and Standard Bank 4.38% to R185.

The rand firmed to R12.778 to the dollar in the day‚ and was at R12.6644 soon after the JSE’s close. A firmer euro further supported the rand‚ with the former last seen at $1.1828 from $1.1745.

The rand gained significantly on Friday‚ following a number of legal setbacks for Dlamini-Zuma’s camp‚ but analysts said the outcome of the election was still too close to call.

Local bonds firmed on the stronger rand‚ with the R186 last bid at 8.85% from 9.01%. The rally in the local fixed-income market reflected optimism that Ramaphosa would win the ANC presidential race.

The top-40 Alsi futures index rose 0.15% to 51‚130 points. The number of contracts traded was 67‚584 from Friday’s 27‚299.

By: Maarten Mittner – BusinessLIVE

Source: TMG Digital.

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