Daily Solutions – 10 October 2017

By Alexander Forbes Investments on Oct 10, 2017 in Market and Economic Commentary The news

JOHANNESBURG – The JSE all share hit a fourth successive record high on Monday as rand hedges rallied on the weaker domestic currency in line with the pattern established last week. The all share closed 0.52% higher at 57,530,10, breaching the 57,500 level for the first time after hitting 57,000 on Thursday. Naspers closed 0.81% higher at R3,190.44, a new record, while British American Tobacco climbed 2.31%, to R873.39 and Anheuser-Busch InBev 1.89%, to R1,695. Newly listed shares sparkled on the day, with Steinhoff Africa Retail up 1.7%, to R23.90 and tertiary education company Stadio rising 19.19%, to R7.39. Volumes were low at R14bn as some US markets were closed for the Columbus Day holiday. Because it is a federal holiday and not celebrated in some states, the Dow traded and was flat at the JSE’s close. Resources and gold stocks gained to the upside, with industrials not far behind, as the rand touched R13.8629/$. The worst rand level so far this year, of R13.9483/$, was hit on April 10. “The indirect impact of the weaker rand is that the JSE generally benefits since most of the earnings come from outside SA,” said Old Mutual Multi-Managers analyst Izak Odendaal. The rand-hedge component traditionally comes from global groups such as Richemont and British American Tobacco, which have secondary listings on the JSE.

US MARKETS – U.S. equities closed lower on Monday as investors looked ahead to the start of earnings season. The Nasdaq composite fell 0.15 percent to end at 6.579.73, after hitting a record high earlier in the session. The index also snapped a nine-day winning streak. The Dow Jones industrial average also posted an all-time high before finishing 12.60 points lower at 22,761.07. Shares of General Electric were the worst performers on the Dow. They fell 4 percent after the company announced CFO Jeff Bornstein will depart at the end of the year, along with marketing chief Beth Comstock and international executive John Rice. The S&P 500 slipped 0.2 percent to 2,544.73. “It’s natural for the market to digest big moves ahead of a major catalyst. In this case, its earnings season,” said Adam Sarhan, CEO of 50 Park Investments.

EUROPEAN MARKETS – European shares opened slighly higher on Monday after four consecutive weeks of gains, with Germany’s Dax touching a fresh new high, as worries about the situation in Catalonia eased off after Sunday’s demonstration against independence. The pan-European STOXX 600 rose 0.2 percent in early trading while the was up 0.3 percent to a new record of 12,997 points. Spain’s IBEX rebounded 1 percent with Caixabank spiking 2 percent after its board agreed to move its registered office to Valencia. A slight rebound for the pound, which has been suffering over the weekend on Theresa May’s struggle to maintain authority over her cabinet, weighed on the FTSE, which was down 0.1 percent.

ASIAN MARKETS – Most Asia markets closed higher on Monday as investors in Asia digested the release of China Caixin services PMI. With Japan, South Korea and Taiwan markets closed for public holidays, investors turned their attention to China as mainland markets resumed trade after the week-long “Golden Week” holiday. Markets on the mainland rallied, shrugging off lackluster services data released earlier in the session. The Shanghai Composite climbed 0.77 percent, or 25.9310 points, to close at 3,374.8741 and the Shenzhen Composite surged 1.304 percent, or 25.9379 points, to finish the session at 2,014.4295. The blue-chip CSI 300 rose 1.19 percent to touch its highest levels since 2015, according to Reuters data. Hong Kong’s Hang Seng Index was off 0.47 percent by 3:14 p.m. HK/SIN.



Alexander Forbes Investments

Alexander Forbes Investments

Alexander Forbes Investments was established in 1997. We are a forward-thinking and trusted global investment provider, with roots in Africa. In pursuit of certainty we set out to understand our retail and institutional clients’ circumstances and risk tolerance to set clear goals. Our adaptive investment approach, called Living*Investing allows us to maximise opportunity and minimise risk at every stage of the investment cycle.

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