Resources shine on JSE

Johannesburg - The prices of the dual-listed shares on the JSE followed the London market higher on Tuesday, with the FTSE index trading at a new record high shortly after the opening.

Most of the dual-listed shares, which represent about half of the JSE’s market value, are also listed in London, where share prices are supported by the weak pound which has been pulled down by concerns on Brexit conditions.

A weak currency is good news for the FTSE, as the majority of companies on the index earn most of their income abroad and therefore make more in pounds if the currency is weak.

Commodity shares are currently one of the big drivers of the FTSE and some of those companies are also listed on the JSE.

The resources sector was therefore the best performer on the JSE, and by mid-morning the index was already 1.66% higher than the day before. The Industrial index was also 0.77% up as the biggest shares in the index, representing most of its market value, are also listed in London.

The result was that the All-share index traded 0.68% higher at 51 397 points at mid-morning, while the Top 40 index was already 0.78% stronger at 49 650 points. The Financial index however slipped as it took a breather after a strong run in 2016.

Sterling edged lower on Tuesday after sharp drops on Friday and Monday pushed the currency to its lowest closing level since October 11.

Prime Minister Theresa May's comments on Sunday that Britain would not be keeping "bits" of European Union membership stoked fears of a "hard Brexit", as she said border controls would be prioritised over market access.

EU officials say Britain cannot have access to its single market of 500 million consumers without accepting the principle of free movement.

JSE share prices were strong despite a relatively firm rand, which traded 0.242% up against the greenback at R13.50 to the dollar, while the local currency was also almost 2% stronger against sterling at R16.50 to the pound.

Among the top dual-listed commodity shares Anglo American [JSE:AGL] traded 3.73% stronger at R198.75, while BHP Billiton [JSE:BIL] was 2.31% higher at R227.48. Glencore [JSE:GLN], which did quite well last week and gained more than 6% over the previous seven days, added 1.18% to R47.99.

Gold shares were also higher on the back of a firmer gold price, which traded at $1 183.00 per fine ounce, more than 3% higher than a week ago. Sibanye [JSE:SGL] was the busiest share in the sector and lifted 1.18% to R49.79. The Gold index was 1.11% higher.

Richemont [JSE:CFR] was the busiest share on the JSE, with more than 5.5 million shares sold for more than R555m. The stock, which was supported by analysts' comments that it is undervalued, traded 3.38% stronger at R94.28.

Naspers [JSE:NPN] gained 0.97% to R2 145.13 and even Steinhoff [JSE:SHF], which lost more than 6% over the previous seven days, was 0.74% higher at R67.90.

Investors are still busy with profit-taking in the banking sector, one of last year’s top performers, and most banking shares were lower.

Barclays Africa [JSE:BGA] was the busiest share in the sector and lost 1.99% to R166.30. Standard Bank [JSE:SBK] gave up 0.73% by mid-morning to trade at R150.48, and FirstRand [JSE:FSR] was 0.45% lower at R53.12.

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