JSE rises on push from Naspers and Woolies
JOHANNESBURG - SOUTH African stocks hit a record high yesterday, with the JSE All Share Index rising as much as 2.1 percent to an all-time high of 65 347 points before shedding some of the gains to end the day at 64 559.85 points on the surge in Chinese online giant Tencent Holdings that boosted Naspers, and favourable trading guidance from Woolworths.
Naspers, the largest stock on the JSE, rose 7.18 percent to R3 819 after the company’s subsidiary Prosus NV advanced as much as 7.4 percent.
Prosus’ hike was due to its partlyowned Tencent which gained the most in 10 years, rising 11 percent on the Hong Kong stock market as investors scrambled for thousands of January call options that expire on Thursday.
Woolworths jumped 15 percent, but later settled 11.09 percent higher at R44.79 after it forecast a substantial hike in its first-half headline earnings per share in the final six weeks of the period ended December 27.
Shoprite rose 1.73 percent to R13 900, Pick n Pay 2.15 percent to R53.33, and Massmart 0.35 percent to R40.47 per share.
Gold mining stocks rose 4.54 percent to 4 010 index points as Harmony Gold rallied 4 percent to R67.82 after saying it was on track to meet its output guidance for 2021.
GoldFields also rose 5.03 percent to R149.99, while AngloGold Ashanti rose 4.51 percent to R356.33 and DRDGold 5.08 percent to R16.55 per share. FXTM senior research analyst Lukman Otunuga said the incredibly positive note in the main stock index was triggered by Naspers’s rise to new highs.
Otunuga said other factors sweetening appetite for emerging stocks revolved around the prospects of additional fiscal stimulus and expectations around the US Fed maintaining its ultra-accommodative monetary policy.
“While South African stocks are likely to push higher amid external factors, the domestic conditions at home may limit upside gains,” Otunuga said.
“Much focus will be directed towards the annual budget in February which could offer key insight into whether South Africa can bring its debt under control.
“The outcome of the Budget may set the tone for the first half of 2021 while impacting sentiment towards South African stocks and rand.”
The rand, however, continued trading flat after risk appetite turned negative, trading 0.51 percent weaker at R15.25 to the greenback by 5pm.
Investec chief economist Annabel Bishop said the rand was forecast to average R15 to the dollar in the first quarter of 2021.
“South Africa could fall into the single B credit rating category from Fitch as early as the end of March, and S&P also has South Africa on BB-, with the next rung down B+,” she said.
“S&P’s country review is also likely after February’s 2021 Budget, and South Africa’s government has indicated possible further borrowing,” she said.