JSE weaker as investors adopt risk-averse stance

Tuesday 18th August, 2015

The JSE was weaker at midday on Tuesday despite a more than 5% gain in the gold index.

Investors are turning their backs en masse on emerging markets which‚ directly and indirectly‚ are being affected by global market jitters over the possible slowdown in the Chinese economy.

"The two that really stand out with connectivity and direct risk are SA — the metal exporters — and Russia‚ the oil exporters‚" said Nomura research analyst Peter Attard Montalto.

"SA and Russia are clearly the most dependent on the Chinese economy‚ and this dependency has been growing since 2008‚ albeit with a rather dramatic pullback in SA recently. As of June 2015‚ exports to China accounted for 9.6% and 7.8% of SA’s and Russia’s total exports‚ respectively‚" Montalto said.

At 12pm‚ the all share was down 0.36% to 50‚566.60 points and the blue-chip top 40 index had shed 0.41%.

The platinum index led the declines‚ falling 1.11% and the resource index trailed closely behind falling 1.07%. The bank index was down 0.91% while the gold index surged 5.22%.

European markets were also lower at midday.

The FTSE 100 was down 0.51%‚ the CAC 40 was 0.3% weaker and the Dax 30 was flat.

Among individual shares on the JSE‚ Anglo American was down 1.87% to R149.27 and Kumba Iron Ore fell 3.24% to R89.99.

In gold shares‚ AngloGold Ashanti was up 5.07% to R88.34. Gold Fields rallied 8% to R37.40.

Platinum miner Lonmin was down 4.07% to R6.83.

Construction company Aveng fell 5.47% to R4.84. SA’s largest construction firm on Tuesday said prospects for business in its key markets in the short term were not promising and‚ as a result‚ the company would focus its attention on the recovery of underperforming businesses and preserving its balance sheet. Aveng reported a diluted headline loss per share for the year ended June 2015 of 189c from headline earnings per share of 26c in the year-earlier period.

Cashbuild was up 3.46% to R321.30.

The Anchor Group added 3.32% to R13.69.