Rand slumps, JSE down as 10-year Treasury yields blow out

Johannesburg - The JSE closed weaker on Friday as banks and retailers dragged the local index lower due to the weaker rand.

The benchmark 10-year Treasury yield broke out above its 200-day moving average to reach a session high of 8.68%, as investors sold off South African bonds.

This in conjunction with a stronger US dollar saw the rand slump by more than 1.4% to reach a session low of R12.81/$. With the US dollar extending its gains, the local unit looks set for more weakness over the weekend; however, at 17:00 it was trading at R12.73/$.

Retailers Truworths [JSE:TRU], The Foschini Group [JSE:TFG] and Mr Price [JSE:MRP] lost 3.16%, 2.3% and 2.37% respectively.

Bankers Barclays Africa [JSE:BGA] and Nedbank [JSE:NED] lost 3.01% and 1.22% respectively. Imperial Holdings [JSE:IPL] and Rand Merchant Bank Holdings [JSE:RMH] lost 2.89% and 1.87% respectively.

Richemont [JSE:CFR] came under significant pressure after the release of their full-year 2018 results, which missed most analysts’ estimates. The stock closed 3.7% weaker at R118.98 per share.

Glencore [JSE:GLN] also came under significant pressure following news from the United Kingdom that the company may face a probe from the country’s Serious Fraud Office over bribery allegations in the Democratic Republic of the Congo. The stock ended the day 3.1% lower to close at R65.07 per share.

Datatec [JSE:DTC] added 12.93% to close at R23.50 per share while Steinhoff International [JSE:SNH] was buoyed by news of the meeting that took place between the firm’s executives and lenders in London. The stock jumped 12.5% to close at R1.80 per share.

Murray and Roberts [JSE:MUR] gained 4.03%, while Brait [JSE:BAT] and Greenbay Properties [JSE:GRP] added 2.42% and 3.88% respectively.

Rand hedges recorded modest gains on the back of the weaker rand. As a result, stocks such as Mondi Ltd [JSE:MND] and Mondi Plc [JSE:MNP] gained 1.93% and 1.72% respectively.

Reinet [JSE:RNI] added 1.33%, while Sasol [JSE:SOL] and BHP Billiton [JSE:BIL] managed to gain 1.09% and 0.91% respectively.

The JSE All-Share Index closed the day 0.65% weaker, while the JSE Top-40 Index lost 0.74%. The Industrial and Financial Indices lost 1.07% and 1.23% respectively. However, the Resources Index managed to add 0.68%.

Gold gained momentum towards the JSE close to end up trading in the green. It was trading at $1 292.28 per ounce at 17:00, after having a reached a session low of $1 286.16/oz.

Platinum and palladium were trading at 885.69/oz and $968.47/oz at 17:00.

Gains were limited in Brent crude as it managed to reach a session high of $79.87 per barrel. It retraced to trade $79.31/barrel just after the JSE close.

Ethereum slid from its overnight highs to trade at $674.37 per coin at 17.00 CAT, while bitcoin was trading at $8 079.00 per coin.