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Published On: Wed, Aug 24th, 2016

JSE outpaces peers as weakening rand shocks market

THE JSE lifted on Wednesday, thanks to a weaker rand, which favoured stocks that derived most of their revenues offshore.

Heavyweight industrial stocks and resources drove the all share index 1.11% higher to 53,547 points at lunchtime.

But a weaker currency choked retailers and financial stocks, particularly banks, which were between 4% and 6% lower.

The rand has weakened by more than 50c against the dollar since late on Tuesday as news broke that Finance Minister Pravin Gordhan could face arrest, after receiving a letter from the Hawks asking that he present himself at the unit by Thursday.

The “don’t touch” SA switch has firmly been pressed, said TreasuryOne currency dealer Andre Botha. “The shaky political sphere we have negotiated in the past six months is in danger of collapsing, and a lot of good sentiment has been washed away,” he said.

The sharply weaker rand bodes ill for inflation, which slowed to 6% in July on an annualised basis, from 6.3% in June, according to Statistics SA data.

Europe’s main stock market were mixed at midday, as were their Asian counterparts ahead of the keenly awaited speech from the US Federal Reserve chair Janet Yellen on Friday. The French CAC rose 0.5%, while the FTSE fell 0.17%. The German DAX rose 0.31%.

Yellen is expected to clear up confusion on the interest-rate outlook in the US.

Among the rand-hedge stocks, SABMiller rose 4.44% to R811.89, with British American Tobacco rising 3.75% higher at R897.50. Richemont jumped 3.72% to R86.47.

Anglo American was 3.22% higher at R159.99 and BHP Billiton gained 3.34% to R198.03. Anglo Gold Ashanti was up 5.34% to R260.99.

Standard Bank tumbled 6.31% to R139.49, with FirstRand slumping 5.2% to R46.89 and Barclays Africa losing 5.18% to R154.93. Sanlam was off 3.01% to R63.77.

Mr Price was 3.26% lower at R220.97 and The Foschini Group lost 4.13% to R146.56.