The all share index on the JSE reached new record highs for four out of the five days last week and closed Friday on a new high of 59638.21 points. This despite the news that the country’s unemployment rate remained at a high 27.7percent during the third quarter, that the outlook for manufacturing production still remains negative and market evaluations towards a further junk downgrading within the next few weeks remain eminent.
These uncertain geopolitical factors and weak economic indicators had a negative effect on the bond market. The Government’s R186 bond increased further to 9.2percent against the 9.13percent the previous Friday and 8.8percent the day before the medium term budget speech on October25.
Commodity prices remains positive and the Brent oil price traded above $60 (about R838) a barrel.
The rand, after four days of good recovery, had tumbled once again on Friday to end the week weaker than the previous Friday. The local unit traded last Wednesday and Thursday well below the R14 to the dollar level, but lost 23c on Friday alone to R14.22 to the greenback at the close of the JSE on Friday. This was 0.6percent weaker than the previous Friday.
Against the euro, the rand lost 13c (0.8percent) and had traded Friday afternoon on R14.54, and against the pound the currency depreciated by 4c (0.2percent) to R18.59, despite the weaker pound after the Bank of England had increased interest rates last Thursday.
News that US interest rates remained the same and higher job figures published on Friday boosted global share markets. The US unemployment rate came down to only 4.1percent in October, while the average hourly wage stayed the same. This gives a good change that interest rates in the US will not increase soon.
On the JSE, share prices were helped by this news and the weaker rand. The all share increased by 1.5percent last week. The index is now already 17.7percent higher than the beginning of the year.
All the other main sub-indices also had increased, with financials gaining 1.8percent, industrials up by 0.8percent and resources climbing by 3.5percent.