The JSE remained quiet by midday on Thursday as investors waited anxiously for the local monetary policy committee’s (MPC) rate decision at about 3pm.
The consensus is for an unchanged repo rate at 11%, according to a survey of leading economists. However, it was a fairly close call as, of the nine leading local economists surveyed, four expected an increase of 50 basis points.
By noon, the JSE’s broader all-share index had shed 0,23%. Banks declined 1,62%, financials were off 0,81% and industrials gave up 0,17%. Resources were 0,09% softer, the platinum-mining index improved 0,1% and the gold-mining index advanced 3,54%.
The rand was bid at 7,91 to the United States dollar from 7,81 when the JSE closed on Wednesday, while gold was quoted at $938,85 a troy ounce from $926,70/oz at the JSE’s last close.
“There is a lot of unwinding ahead of the MPC decision today [Thursday] and there aren’t a lot of volumes. The guys are being very cautious and we will have to wait and see what happens today,” said an equities trader.
“They [analysts and economists] are divided about whether it will stay unchanged or go up by 50 basis points,” he said.
He added that if South African rates go unchanged, the news will be positive for retailers and the market might pick up slightly. “There is a bit of rhetoric regarding a recession at the moment so I think that if they decide to leave rates unchanged it will lift the mood,” he said.
However, a 50 basis point increase would be bad for the JSE as the rand would firm, putting pressure on commodity counters, and consumer stocks would decline, continued the trader.
“For now, the rand is slightly weaker and mining counters have firmed. I think that some of the currency guys are betting on no rate hike because the rand has weakened a bit,” he concluded.
On the JSE, resource heavyweight BHP Billiton dipped R2,55 to R271,25, Anglo American eased R3,99 to R517,51 but Sasol recovered R3,25 to R412,50.
Gold counter AngloGold Ashanti gained R8,98, or 3,2%, to R290, Gold Fields climbed R4,35, or 3,95%, to R114,50 and Harmony was up R3,50, or 3,93%, to R92,50.
Platinum-mining share Anglo Platinum pulled back R3,19 to R1 296,81 but Impala Platinum perked up 48 cents to R325,48.
Brewer SABMiller added R4,98, or 2,96%, to R172,98 but luxury goods group Richemont was off six cents at R44,89.
Fixed-line operator Telkom decreased 80 cents to R131,02 and mobile operator MTN Group lost R2, or 1,48%, to R133,50.
Bank counter Nedbank fell R2,05, or 1,71%, to R118 and Standard Bank was R2, or 2,14%, weaker at R91,40. — I-Net Bridge