The JSE Securities Exchange South Africa (JSE) was drifting in the red just before noon on Thursday, on lack of buying interest ahead of the South African Reserve Bank monetary policy committee’s (MPC) decision on interest rates just after 3pm. Volumes were very light, with less than R400-million-worth of shares changing hands.
By 11.51am, the all-share index dipped 0,18%. Financials and banks weakened 0,23% and 0,29% respectively. Resources retreated 0,29%, the gold mining index shed 0,3% and the platinum mining index eased 0,2%. The all-share industrial index was flat.
The rand was trading at R6,98 to the dollar, little changed from when the JSE closed on Wednesday, while gold was quoted at $371,40 an ounce from $373,85/oz at the JSE’s last close.
“It has been very very quiet. Everyone is waiting for the MPC and the market is drifting down more on lack of interest than anything else,” a dealer said.
He explained that the MPC decision’s impact on the bourse would be mainly via the rand.
A rate cut of 100 basis points would likely see the rand strengthen, dragging the JSE down. However, if the MPC cuts the repo rate by more than 150 basis points, the rand could weaken, giving the equity market a lift.
Favourable interest rate differentials and the related carry trade are widely regarded as a reason for the rand’s strength in recent months, although the local unit firmed after the MPC cut the repo rate by 150 basis points in June, 100 basis points in August and a further 100 basis points at a special meeting convened in September.
Shares to advance in morning trade included Impala Platinum, which climbed R1,69 to R574,70.
AngloVaal Industries advanced 10 cents to R17,50, while steel producer Iscor strengthened 1,8% or 40 cents to R22,60.
Cellular network operator MTN Group was up 1,09% or 24 cents to R22,25, while London-listed IT group Dimension Data was 1,84% or 7 cents firmer at R3,87.
Banking group Nedcor inched up 20 cents to R70, while its parent company Old Mutual improved five cents to R12,15.
Nedcor plunged almost 6% on Wednesday after the market took a dim view of Tuesday’s announcement that Tom Boardman would replace Richard Laubscher as the group’s CEO.
New Africa Capital jumped 2,58% or 16 cents to R6,35.
On the JSE’s downside, telecommunications group Telkom lost 1,02% or 50 cents to R48,50.
London-listed diversified resources group Anglo American was off 20 cents at R139,90 and BHP Billiton lost 40 cents to R55,60.
AngloGold was down R1,20 at R262,80 and AngloPlat was 1,04% or R2,90 in the red at R275,10.
Standard Bank slipped 30 cents to R34,50. — I-Net Bridge