JSE turns positive as sharp gains in banks counter losses in rand hedges

Following a late start to trade‚ the JSE closed fractionally higher on Wednesday as a firmer rand wreaked havoc on the larger rand hedges‚ while banks leapt as the currency reached levels last seen in March.

The JSE managed to resolve a technical glitch that halted trade until about 11.20am‚ with turnover on the day at an expected low R7.5bn; the daily average for the bourse is R20bn.

The rand reached an intra-day best of R12.33 to the dollar‚ its strongest level since just prior to the firing of then finance minister Pravin Gordhan. It got all the way up to R12.31 on March 27‚ just before Gordhan’s sacking‚ but then slumped to R13.42 in the few remaining days to the end of that month.

At the JSE’s close the rand was at R12.35 to the dollar‚ from Tuesday’s R12.50.

The JSE all share added 0.07% to 58‚844 points while the top 40 relinquished 0.15%. Banks gained 3.02% and financials 1.29%. Gold miners leapt 4.28%‚ while industrials were down 0.45%.

British American Tobacco was one of the bigger casualties among rand hedges‚ falling 4.06% to R825.38 — it should be noted‚ however‚ that it was trading ex-dividend. Richemont lost 3.08% to R111.97‚ and Anheuser-Busch InBev 2.62% to R1‚388.92.

FirstRand leapt 4.01% to R66.20‚ Barclays Africa Group 2.82% to R176.85‚ and Standard Bank 2.81% to R192.50.

The platinum index initially fell 4%‚ but reversed its losses to end 1.27% higher‚ with Northam doing best of the sector‚ adding 4.51% to R51.47‚ Jubilee 4.14% to R1.16 and Pallinghurst 2.14% to R2.86.

Steinhoff International lost 1.28% to R4.62. It has lost more than 90% of its value since being hit by an accounting scandal earlier in the month‚ which resulted in the resignation of its CEO Markus Jooste.

The company has not released restated and/or audited results for its 2016 and 2017 financial years‚ and is yet to say when it will do so. Its US subsidiary Mattress Firm‚ however‚ managed to secure up to $225m in credit despite the woes of its parent.

Mattress Firm issued a statement late on Friday night saying it had been approved for an initial $75m “senior secured asset-based revolving credit facility”‚ which could be extended up to $225m.

Recently unbundled Steinhoff Africa Retail was little changed at R15.74.

Christo Wiese‚ Steinhoff’s major shareholder‚ told Reuters on Friday that he thought it would be a good idea for Steinhoff to take over Shoprite‚ in which he is also a major shareholder. He also sold R868m worth of Shoprite shares on the day‚ resulting in a small drop in the retailer’s share price. It rebounded on Wednesday‚ however‚ surging 5.27% to R215.28.

Anglo American gave up 1.04% to R247.68‚ while African Rainbow Minerals added 2.61% to R134.

By: Andrew Linder – BusinessLIVE

Source: TMG Digital.

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