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Rand firms as ANC’s top leadership is set to meet


JSE Market Indicators 23 May

Rand firms as ANC's top leadership meet

The Rand firmed to session highs of R13.02 against the US Dollar, as news came out that the ANC’s NEC was going to raise the option to remove President Zuma, as part of the discussions on the no confidence motion called by opposition parties.

As a result, rand sensitive stocks such as banks and retailers traded firmer on the day. Standard Bank and Nedbank were the biggest gainers on the Financials index, closing up 3.63% & 3.27% on the day. Retailers were slightly mixed, with Shoprite closing 1.99 % firmer, Truworths was up 0.57%, however Mr Price closed down 0.50%. Sasol had a decent run, closing the day up 1.22%, mainly on the back of firmer Brent Crude prices. Coronation released a somewhat lukewarm set of results but nonetheless, they rallied in today’s trading session & closed up 5.71%. Surprisingly, Rhodes Food Group traded lower despite reporting increases in operating profit margin, earnings per share & headline earnings per share for the 6 months reported. The stock closed the day down 4.81%.

The JSE All Share Index closed 0.06% firmer, the JSE blue chip Top 40 was up 0.09%. Financials posted gains of 1.39%, mainly on the back of the firmer Rand. Resources were 0.78% weaker and Industrials also closed weaker, posting losses of 0.08%.

Locally, investors are now looking forward to the CPI & PPI data which is expected from StatsSA on Wednesday. This should provide some insight on the change in the cost of goods, and more importantly it will be key to see if inflation is within the South African Reserve Bank’s upper target of 6%. South African consumers will be looking for a bit of relief when the CPI data is released, however recent increases in Brent Crude prices could mean that we will see that increased cost being passed on to consumers in the short-term.

Gold traded mostly flat on the day. Despite the terror attack in Manchester, England, we did not see much volatility in the underlying Gold prices. At the JSE close, Gold was trading at $1259.90 per ounce, having managed to reach a high of $1263.88 per fine ounce in the early hours of trading. The price of the commodity has also been aided by the weakness in the US Dollar, which is still relatively weaker against a basket of major currencies. Platinum traded higher on the day, managing to reach highs of $958.54/ounce before trading at $954.35/ounce at the close of the JSE.

Brent Crude extended gains in today’s trading session, on the back of the prior day’s announcement by the Saudi energy minister of extended output cuts. Brent Crude managed to reach session highs of $54.19 per barrel, before trading at $54.03 per barrel when the JSE closed. Globally, the sentiment for Brent Crude remains bullish as OPEC members seem adamant to stick to the agreed production cuts.

Musa, Trading Desk at GT247.com, For Fin24
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