SA markets close weaker on Friday

South African markets were weaker on Friday as global risk appetite waned after disappointing US jobs data while the eurozone economic woes also continue to weigh on markets.

EQUITIES

The JSE gave up earlier gains to end flat on Friday after the disappointing US jobs report triggered a sell-off in general mining shares.

Industrial shares continued to perform‚ however‚ with the index closing at a record high.

At 17:00 local time‚ the JSE all-share index was flat (0.01%) at 34‚226.21 points‚ while resources lost 0.91%‚ gold shares gave up 1.67% and platinum counters shed 1.31%.

Financials inched up 0.10%‚ but banking stocks slipped 0.10% and industrials firmed 0.59%.

The rand was trading at 8.25 to the US dollar‚ from 8.13 at the JSE’s close on Thursday‚ while gold changed hands at US$1‚588.24 a troy ounce from US$1‚607.60/oz at the JSE’s previous close and platinum was quoted at $1‚455.50/oz‚ from $1‚472.50/oz previously.

“All things considered‚ our markets held up quite well on the week. The big feature was industrials attracting record inflows from foreigners‚” David Shapiro‚ director at Sasfin Securities‚ said. “The big cap property counters have also been mopped up by these investors based on good individual performances. The outlook for commodity shares is still bleak with the latest US jobs report not counting in their favour.”

At 17:00 local time (15:00 GMT)

TRADE CLOSE PERC POINTS

ALL SHARE (J203) 34226.21 34222.58 0.01 3.63

INDUSTRIALS (J257) 39439.12 39209.45 0.59 229.67

FINANCIALS (J580) 26108.84 26081.80 0.10 27.04

RESOURCES (J210) 46977.79 47411.41 -0.91 -433.62

GOLD (J150) 2314.56 2353.88 -1.67 -39.32

PLATINUM (J153) 48.21 48.85 -1.31 -0.64

BANKS (J835) 48477.05 48523.72 -0.10 -46.67

Value traded R10.777bn

Volume 218.039 million shares

Highest value traded shares:

MTN 144.80 rand up 0.20 rand

Anglo 269.84 rand dn 3.58 rand

Sasol 343.22 rand dn 2.68 rand

BHP Billiton 236.72 rand dn 0.56 rand

SAB 339.10 rand up 6.48 rand

BONDS

South African bonds were softer in afternoon trade on Friday‚ after the downbeat US jobs report knocked the rand.

At 18:00‚ the benchmark R157 bond was trading at 5.970% from Thursday’s close of 5.900% and Wednesday’s close of 5.930%. The R207 was bid at 7.005% and offered at 6.975% from a previous close of 6.940% and the R186 was trading at 7.855% from its previous close of 7.785%.

At the end of May the R157 closed at 6.390%‚ the R207 at 7.645% and the R186 at 8.375%.

The rand was bid at R8.2604 against the dollar from Thursday’s close of R8.1347.

“It is a bit of profit taking that has coincided with worse than expected US jobs report. The SA bond market‚ along with other emerging markets like Mexico and Turkey‚ have had strong runs because of better yields and better fiscal positions than the developed world‚” said Werner Gey Van Pittius‚ co-head of emerging markets debt at Investec Asset Management.

US nonfarm payrolls grew by just 80‚000 new jobs in June‚ falling short of expectations of 100‚000 and suggesting further weakness in the economy.

The unemployment rate stood at 8.2%‚ in line with expectations‚ Dow Jones Newswires reported.

18:00 local time Range so far Previous close

(16:00 GMT)

R157 (2016) 5.970% 5.915% - 5.980% 5.900%

R207 (2020) 7.005% bid 6.960% - 7.030% 6.940%

R186 (2026) 7.855% 7.805% - 7.875% 7.785%

Bond Exchange of South Africa (in billions of rand)

Wednesday Thursday

Nominal cumulative volume R71.014 R46.461

Net foreign purchases/(sales) (R0.109) R0.481

Net foreign purchases/(sales) in 2012: R51.615 billion

Net foreign purchases in 2011: R37.501 billion

Repo rate: 5.5%

CURRENCIES

The rand was under-pressure‚ tracking the euro weaker in afternoon trade on Friday‚ in the wake of weak US jobs data and growing uncertainty lingering over Europe.

US non-farm payrolls came in short of market expectations at 80‚000 new jobs in June‚ short of the estimated 100‚000‚ pointing to further weakness in the world’s largest economy.

The poor data came just after similar disappointing data on the US manufacturing and services sectors.

At 18:00‚ the rand was bid at R8.2604 to the dollar from its previous close of R8.1347. It was bid at R10.1591 to the euro from its previous close of R10.0690 and at R12.7854 against sterling from R12.6167 before.

The euro was bid at US$1.2300 from its previous close of $1.383.

“The US data fell short of expectations. We have been tracking the euro and it seems it will be much of the same into next week‚” a local trader said.

18:00

(16:00 GMT)

Dollar/Rand 8.2604 8.1210- 8.2855 8.1347

Euro/Rand 10.1591 10.0621-10.2177 10.0690

Sterling/Rand 12.7854 12.6069-12.8449 12.6167

Euro/Dollar 1.2300 1.2295-1.2402 1.2383

FUTURES

South African near-dated futures ended lower on Friday as global risk appetite waned after disappointing US jobs data while the eurozone economic woes also continue to weigh on markets.

The near-dated alsi lost 141 points‚ or 0.47%‚ to end at 29‚954 points.

The total number of contracts that exchanged hands was 31‚481 from 37‚512 on Thursday.

The rand was bid at 8.26 to the US dollar from 8.12 on Thursday‚ and the spot price of gold was at US$1‚584.15 an ounce from $1‚606.45.

Dow Jones Newswires reported that signs of sluggish US jobs growth on Friday added to recent weakness in the economy‚ sending investors fleeing from stocks and commodities. Leading the fall were stocks sensitive to global growth.

The moves came after the Labor Department's monthly employment report showed nonfarm payroll growth improved by just 80‚000 in June from an upwardly revised reading of 77‚000 in May. That fell short of the 100‚000 jobs that economists had expected. The unemployment rate stood pat at 8.2%‚ in line with expectations.

The soft reading comes on the heels of similarly disappointing reports on the U.S. manufacturing and services sectors‚ and caught some economists off guard. On Thursday‚ many of them had nudged their predictions for Friday's report modestly higher‚ following a surprisingly strong report on private-sector payrolls.

"There's little doubt that the U.S. economy is in a soft patch‚" said Brad Sorensen‚ director of market and sector analysis at Charles Schwab. "Everything is lining up to confirm that while we're not necessarily in for another recession‚ we're going to get this kind of slow growth that doesn't make anybody happy."

Article by I-Net Bridge‚ Tel: +27-11-280-5143‚ newsdesk@inet.co.za