Local equities close weaker as CA deficit widens

Johannesburg - The Johannesburg Stock Exchange slid further on Thursday, as a weaker rand failed to propel rand hedge stocks higher.

Softer metal commodity prices saw JSE-listed mining companies losing more ground in today’s session. Exxaro [JSE:EXX] shed 5.10%, while Sibanye-Stillwater came under significant pressure, eventually closing the day down 4.14%.

The weaker rand failed to support rand hedge stocks which saw Richemont, BHP Billiton [JSE:BIL] and Sappi [JSE:SAP] all trading under pressure as they lost 1.66%, 2.35% and 1.30% respectively.

Positive full year results from Aspen [JSE:APN], meanwhile, saw the stock jump up 8.51% to close at R309.84 per share. The results indicated an increase in revenue of 16% to R41.2 billion, and normalised headline earnings per share also increased by 16% to 1 463 cents for the year reported.

Impala Platinum’s [JSE:IMP] full year results were less positive, as they reported a basic headline loss of 137 cents per share. Earnings were directly impacted by an impairment of R10.2 billion. Some of their mines failed to meet operational targets which affected their profitability in the reported period. The stock came under pressure as it closed the day at R36.80 per share, down 6.48%.

Grand Parade Investments [JSE:GPL], meanwhile, released their full year financial results on Thursday, which were mostly in line with expectations in their trading statement. The food division of the business underperformed as it incurred losses, whilst the gaming and leisure division contributed positively to headline earnings. Overall the business recorded a 331% decrease in headline earnings per share to record a loss of 4.59 cents per share. Basic earnings decreased by 90% whilst revenue managed to increase by 25%. The stock closed the day down 7.41%, at R2.50 per share.

The JSE All-Share Index closed 0.54% lower, whilst the Top-40 Index also lost 0.54%. The Industrials Index shed 0.42%, while the Financials Index lost 0.23%. The Resources Index lost another 1.17% as metal commodity prices continued to put miners under pressure.

Locally, the South African Current Account deficit widened to -2.4% of GDP, as the Current Account balance was recorded at -R110 billion from a prior recording of -R88 billion. The Rand came under pressure as a result, as it weakened to an intra-day low of R13.26 against the greenback. It managed to recoup some of the losses to trade at R13.13/$ when the JSE closed.

Gold was stuck in a volatile session on Thursday, mainly due to a similar volatile price action in the US Dollar. The precious metal was recorded at $1325.36 per ounce just after the JSE closed, after it had managed to slide to an intra-day low of $1315.80 per ounce.

The US Dollar index spiked up after the release of US Initial Jobless Claims, and inflation numbers which came in better than expected. The US Dollar Index peaked to an intra-day high of 92.661 index points, before it retraced sharply to an intra-day low of 92.157 index points. 

Brent Crude was mostly positive and it almost broke above $56 per barrel, peaking at $55.99. This supported JSE listed oil and gas producer, Sasol [JSE:SOL], which closed up 2.22% at R401.08 per share. Brent Crude was trading at $55.81 per barrel just after the JSE closed.

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