JSE firmer‚ aided by rand hedge stocks

Published: 11 June 2013

Johannesburg - The JSE was up slightly on Monday at midday as rand hedge stocks helped lift the local bourse despite losses in banks and retail counters.

“The rand is the main factor driving movement on the JSE today and banks are the key underperformers‚” said Ryan Wibberley‚ head of equity dealing for emerging markets at Investec Asset Management.

At 12:01 the JSE was up 0.44% at 40 944.48 points with the industrial index adding 1.05%; while banks and retailers were down 0.92% and 0.57% respectively.

“There isn’t much volume today compared to last week. Weaker Chinese data once again brought the global picture to the fore‚ and this is all against the backdrop of uncertainly about whether or not QE will be tapered off‚” he said.

Among the banks‚ Standard Bank (SBK) shed 1.37% to R108.39‚ and First Rand (FSR) traded 0.81% lower at R27.03. Unsecured lender fears continue to put Abil (ABL) under pressure having given up 2.67% to trade at R17.47.

“At the moment banks seem to be the chosen target for people wanting to short the SA consumer. Banks traditionally react negatively to a weaker rand as a result of its effect on inflation. A weak rand has also put an end to any possibility of a rate cut and doesn’t bode well for SA consumer. Retailers are down on the same story. The weak rand is also pinning up the rand hedges‚” said Wibberley.

The general retail index was down 0.57% at 59124.54 points with Clicks (CLS) and Foschini (TFG) leading losses down 0.85% and 0.82% respectively.

Rand hedge stocks continued to benefit from the weaker rand with British American Tobacco (BTI) jumping 2.10% to R557.49‚ Compagnie Richemont (CFR) advancing 2.34% to R92.24 and SABMiller (SAB) trading 1.40% higher at R513.44.
- I-Net Bridge