STOCKS edged towards a record high again on the JSE yesterday, lifted by a rally in shares of South African heavyweight tech giant, Naspers.
Naspers was the biggest contributor to the stocks’ rally, rising more than 11 percent in intraday trade to close at R2 960. This was followed by its subsidiary Prosus, which was 11.2 percent higher in intraday trade to close at R1 364.13 per share.
Naspers makes up almost a fifth of the bourse, with more than R1.16 trillion of market capitalisation, even after spinning off most of its assets into Amsterdam-listed Prosus in 2019.
Investors have turned optimistic on the sector and were finding a bottom in prices after the recent sell-off due to the recent Chinese tech regulatory crackdown.
As a result, the JSE All Share Index breached the 69 500 points mark, pushing towards the record 70 000 points reached earlier this year on the rebound of the global economy. The index closed at 69602.04 points.
FXTM’s senior research analyst Lukman Otunuga said commodity markets had stabilised after Monday’s brutal sell off. However, he said persistent concerns over the spread of the Delta Covid-19 variant had hampered risk sentiment in a number of stock markets.
“The negative developments revolving around Covid-19 have certainly left investors on edge with caution, likely to remain the name of the game over the next few days,” he said. “Nevertheless, the week ahead promises to be eventful and potentially volatile thanks to key economic data including the US CPI report and speeches from numerous Fed members.”
However, the rand did not follow the stock market trajectory as it continued to be under pressure from the strong dollar, breaching the R14.80 to the dollar mark. By 5pm the rand was at 14.83 to the greenback. It weakened to R14.84 to the dollar in early trade as the dollar remained firm against all emerging markets currencies.
Currency analysts were of the view that Friday’s US payrolls and unemployment numbers boosted the dollar as US Treasury yields climbed, and the Fed tapering expectations grew.
ActivTrades’ senior analyst, Ricardo Evangelista, said the dollar index continued to gain ground as the markets priced in the shift in expectations triggered by Friday’s jobs report. “The strength of the US labour market surprised to the upside and made it more likely for the American central bank to start tapering its asset purchases sooner than previously expected,” Evangelista said. “This dynamic is likely to continue to support the dollar, especially if Wednesday’s inflation numbers also surprise to the upside by reading above last month’s rate of 5.4 percent.”
TreasuryONE’s currency specialist, Andre Cilliers, said the rand could now weaken to R15 to the dollar if its losses continued. “The stronger dollar move accelerated on Monday, with the rand losing 1.35 percent to close at R14.78,” Cilliers said.
“The rand was not the only loser, as all emerging markets currencies are currently under pressure from the dollar. A move above R14.85 for the rand will bring R15.00 back into play.”
BUSINESS REPORT