JSE powers its way past record 65000 pts
JOHANNESBURG - THE JSE YESTERDAY surged and breached the 65 000 point level, the highest gain ever, again buoyed by gains in the mining and retailing industries.
This was despite Eskom's recurring power cuts and uncertainty over the country's vaccination programme.
The JSE All Share Index rose by a significant 1.2 percent to 65 059 points by 5pm yesterday, while the Top40 Index was 1.31 percent higher to reach an unprecedented 59 647 points.
The mining index advanced 3.45 percent to 59 576 points, while general retailers gained 0.23 percent to 5 348 points. Anglo American rose 4.69 percent to R528.87 per share, Sibanye-Stillwater was 3 percent higher at R63.85, while Impala Platinum gained 1.33 percent to R217.60 a share.
Shoprite rose 3.05 percent to reach R141.71 a share, Massmart was 1.17 percent higher at R44.98, Woolworths 0.07 percent at R45.83, while Pick n Pay eased 1.28 percent to R56.13.
The JSE benchmark index has performed exceptionally this year, reaching unprecedented levels as the markets are hit by risk-on sentiment over rolling out of vaccines globally.
Old Mutual Wealth investment strategist Izaak Odendaal was optimistic of the JSE's performance, saying South African bonds and equities were still cheap relative to global alternatives. Odendaal said the JSE All Share Index had returned 48 percent from late March 2020 to now, while the rand gained 16 percent over the same period despite South Africa's ratings downgrades.
“Never underestimate the extent to which global markets can drag South African investments with them,” he said.
“Nothing has dramatically changed in South Africa over that period except perhaps that the likelihood of the more pessimistic economic scenarios playing out receded.”
The government on Sunday announced that it had put on hold its vaccination programme earmarked to start tomorrow after trials with the AstraZeneca and Novavax vaccines in South Africa showed substantial diminished efficacy against mild/moderate infections of the 501Y.V2 strain, which was behind the second wave in the country.
Meanwhile, the rand was slightly muted at 0.06 percent higher to R14.86 against the dollar after depreciating to R15 to the greenback in early afternoon trade.
Still, the rand remained not far from a two-week high hit in the previous week.
This was on expectations of some improvement in the country's fiscal consolidation on the back of stronger-than-expected revenue collections.
Investec's chief economist Annabel Bishop said the rand would average R15 to the dollar for the full first quarter of 2021 if it stayed around current trading levels of R14.94.
Bishop however said despite the rand averaging around R15.10 to the greenback, it would remain volatile, driven by global financial market risk sentiment.
“The rand is still very vulnerable to weakness, but could also see bouts of further strength as global financial markets' risk aversion levels wax and wane, due to the domestic currency's high sensitivity to market movements because of the high risk status of its portfolio assets,” she said.