The outstanding feature on the JSE during the past week was market volatility with a bunch of shares running to new record levels one day and hitting back the next, while others lacked direction from minute to minute.
The market ended the week lower, but not before pulling back from the previous week’s lows with a healthy rally to touch new highs.
The main culprits in pushing the market down were gold and other mining shares – the exact same shares that helped to keep the market up during the last few weeks, when nobody seemed to have any confidence in any financial markets.
Among the worst performance on the gold board were shares such as AngloGold Ashanti [JSE:ANG] ,which fell by more than 8%, and Harmony Gold [JSE:HAR] that declined by nearly 10% during the week. Gold Fields [JSE:GFI] shed slightly more than 5%.
Kumba Iron Ore [JSE:KIO] declined by some 7%, but ArcelorMittal [JSE:ARC] bucked the weaker trend to end the week nearly 7% higher. Platinum shares were all about 1% lower, while energy counters ended the week mixed.
Food producers and food retailers seemed to be in favour once again the past week and most shares in these two sectors continued their slow steady advance, evident during the last few weeks.
The retail sector delivered a few surprises: Truworths [JSE:TRU] advanced more than 3% during the week to break its losing streak, while not-very-popular JD Group [JSE:JDG] added 2.5%. Mr Price [JSE:MPC] ended the week slightly higher after a trading statement that announced good sales for the last quarter.
Consumer sensitive MTN Group [JSE:MTN] increased by nearly 8% during the week, showing that investment managers and investors still expect strong growth from the company and that they are willing to pay a price to earnings ratio of nearly 18 times for the stock. Vodacom [JSE:VOD] ran nearly 5% to put the share on a PE ratio of close to 15 times.
Banks were strong with Capitec Bank [JSE:CPT] shrugging off the contagion from African Bank’s problems. Capitec’s share price increased by a solid 10% during the week, seemingly entering a strong recovery phase.
The week ahead
The most important event this week will be the release of the Reserve Bank’s quarterly bulletin which will give the official view of economic prospects, as well as pages of detailed economic data for people to form their own views.
In short, it is bound to say that the economy is not doing that well and that there is not much the authorities can do to improve things.
A host of large companies are due to announce annual results. The most important include FirstRand Group [JSE:FSR], Sasol [JSE:SOL], JD Group [JSE:JDG], Steinhoff International [JSE:SHF], Aspen Pharmaceuticals [JSE:APN] and Spur Corporation [JSE:SUR].
