JSE stems four days of losses

Johannesburg - After four days of losses share prices on the JSE have stabilised, moving the major indices only marginally higher than the previous close, when the market recovered some of its sharper losses during the day.

Particularly financial shares, which dropped sharply on Thursday due to another bank scare in Portugal, recovered somewhat this morning.

The mood in the banking sector also improved with a trading statement from Barclays Africa [JSE:BGA], which said it expected an improvement of 11% in earnings.

By midday on Friday, the All-share index, which dropped below 51 000 points on Thursday, was only 0.06% higher on 51 025, while the Top 40-index was only 0.02% higher on 44 947.

The focus the last two days has been on financial stocks after the parent company of one of Portugal’s biggest banks defaulted on a note, which raised fears of another financial crisis in Europe. Share prices worldwide, including on Wall Street, were under pressure, but the mood changed when it became known that the Portuguese central bank have insurance in place to protect investors.

On Thursday, the share prices of all the major South African banking groups were more than 2% down, but by midday on Friday, Barclays Africa was 0.98% higher on R162.33.

Standard Bank [JSE:SBK], which is still trying to sort out problems in China with suspected fraud with securities, traded only 0.10% stronger on R144.65.

FirstRand [JSE:FSR] improved with 0.44% to R40.93 and Nedbank [JSE:NED] was 0.22% stronger on R233.00.

The Bidvest Group [JSE:BVT] which is on the acquisition trail and acquired stakes in food distribution companies in Britain and Italy, traded 0.53% higher on R283.22.

Some of the frontrunners of the last few weeks reached new 52-week highs on Friday morning. One of them is Sappi [JSE:SAP], which added 2.58% to yet another record of R42.60. Hulamin [JSE:HLM] also showed strong gains and by midday was 3.09% better on R8.35.

In the retail sector Woolworths [JSE:WHL] and Mr Price [JSE:MPC] continued to set new 52-week highs.  Woolworths, which are busy with acquisitions in Australia, rose with another 1.58% to a new record of R79.49. This is remarkable, because the share price was still in February this year on a 52-week low of R58.97. The share price improved with 18.6% over the last twelve months, but is now trading at a relatively high price earnings ratio of 21.5.

Mr Price is now 44% higher than a year ago after the share price increased with 1.68% to R190.40 on Friday. Its price earnings ratio is now 24.9.

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