SARB rate cut boosts local stocks

Local stocks resumed trading on Tuesday and
extended their gains from last week’s close before the closure for the Easter
holidays.

The South African Reserve Bank grabbed
headlines after the Monetary Policy Committee unanimously decided to cut the
repo rate by another 100 basis points to 4.25{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}, in a move that is meant to
cushion the impact of the lockdown caused by the coronavirus. This is not
entirely surprising given the more aggressive stimulus packages that have been
availed for the USA and the European Union.

Gains on the local bourse were also spurred
by the surge in other global markets which rallied on the back of optimism that
coronavirus cases were leveling off. This is a result of a lower number of
cases being reported for hotspots like Spain and New York.

The rate cut announcement by the SARB saw
the rand erase earlier gains against the greenback and trade softer for the rest
of the session. At 17.00 CAT, the rand was trading 0.95{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} weaker at R18.29/$.

On the JSE, constituents of the resources
index recorded the bulk of the day’s biggest gains. Gold miner, AngloGold
Ashanti [JSE:ANG]
climbed 18.25{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R449.80, Gold Fields [JSE:GFI]
surged 19.52{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R134.91, while Harmony Gold [JSE:HAR]
gained 24.04{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R58.62. Platinum miner, Northam Platinum [JSE:NHM]
rallied 15.68{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R94.75, while Anglo American Platinum [JSE:AMS]
climbed 9.03{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R957.53. Steinhoff International [JSE:SNH]
closed amongst the day’s biggest movers after it surged 35.29{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R1.38,
while KAP Industrial Holdings [JSE:KAP]
added 28.57{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R2.70. Vukile Property Fund [JSE:VKE]
rocketed 21.4{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R8.00, while its sector peer Redefine Properties [JSE:RDF]
closed at R3.14 after gaining 17.6{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}.

Sasol [JSE:SOL]
came under pressure in today’s session as it closed 6.81{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} lower at R69.42,
while Ninety One PLC [JSE:N91]
lost 3.51{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R39.90. Healthcare linked stocks traded under some
pressure today. Life Healthcare [JSE:LHC]
fell 4.47{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R19.44, Netcare [JSE:NTC]
lost 4.42{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R15.99, while Mediclinic [JSE:MEI]
dropped 3.37{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R61.00. Sappi [JSE:SAP]
weakened by 4.6{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} as it closed at R21.77, while Kumba Iron Ore [JSE:KIO]
lost 0.89{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R340.95. Capitec Bank Holdings [JSE:CPI]
announced that it’s suspending its dividend in its full year results release,
and it eventually closed 1.24{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} lower at R1057.75. The weaker rand saw rand
sensitives trade softer as declines were recorded for Standard Bank [JSE:SBK]
which lost 0.98{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to close at R112.28, as well as Pick n Pay [JSE:PIK]
which closed at 58.83 after losing 2.24{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}.

The JSE All-Share index closed 3.93{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} higher
while the JSE Top-40 index gained 4.08{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}. The Resources index jumped 7.18{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2},
while the Industrials and Financials indices gained 2.44{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} and 2.76{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}
respectively.

At 17.00 CAT, Palladium was 0.78{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} firmer at
$2228.53/Oz, Gold was up 1.1{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} at $1732.86/Oz, while Platinum had surged 3.36{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}
to trade at $775.57/Oz.

Brent crude was trading softer in today’s
session as it was recorded trading 3.72{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} lower at $30.56/barrel just after the
JSE close.

*Musa Makoni is a trading specialist at Purple Group