South African stocks set for longest winning streak since 2013
The main index has experienced the longest streak in monthly growth for the last eight years.
Over the last month, South Africa’s stock gauge has been on an upward trajectory, with gains by Richemont, ore producers, and banks countering weakness in Platinum and gold markets. The main index has experienced the longest streak in monthly growth for the last eight years.
The Johannesburg stock gauge tracked peers in Asia, which grew after solid economic data paired with President Joe Biden’s spending plans sparked a Wall Street rally of cyclical shares. The US data also recorded a significant drop in jobless claims to an all-time low after the lockdown.
Since late May, the JSE/FTSE Africa All share Index has reported a significant rise for the eighth consecutive month. That makes it the longest winning streak since the beginning of 2013. The Index’s heavyweight Richmont has been among the players climbing over the last month, climbing to a fresh record. In the last week of May, Industrial miners reported a 1.1% to the greatest level within a week amid optimism on the prospects of economic growth.
With this growth, Anglo American Plc reported a 1.2% increase, with Glencore Plc and BHP Group Plc recording +1.7% and +0.7% growth. Bank stocks also advanced to the highest since 5th March, with counters like Nedbank Group Ltd growing by +5.6% and Standard Bank Group Ltd by +1.7%. One of South Africa’s fastest-growing banks before the lockdown, Capitec Bank Holding Ltd grew by 1%, while Absa Group Ltd reported +1.4%.
However, despite the small growth compared to other counters, investors continued looking into how to buy capitec shares post lockdown. First Rand Ltd also reported a 1% increase. Unfortunately, the precious metal index dropped by 0.5%, as platinum and gold prices dropped over the last few weeks. Gold Fields Ltd fell by -1.9%, AngloGold Ashanti Ltd by -1.2%, Impala Platinum Holdings Ltd by 0.1%, and Harmony Gold Mining Co by -1.3% on the last day of May.
Despite foreigners being the net sellers of local securities, the South African benchmark recorded prominent gains, disposing over the 2.75-billion-rand worth of stock in the last week of May. These numbers recorded the second-highest outflows from the beginning of the year. Foreigners also dumped over 6.5 billion rands worth of Johannesburg stocks within a few days.
On Friday 25 June, the FTSE/JSE Share Index closed at the flatline at 66,216 – almost near its highest levels since 17th June. The index was mainly supported by mining operators, with prices of gold and iron ore on the rise. Investors also digested the prospects of a solid recovery on the market after President Joe Biden got a bipartisan senate infrastructure deal.
The fears of the US Federal Reserve tightening early also waned. Domestically, there have been concerns over the rising cases of new infections, prompting the government to accelerate its program to curb the spread of the disease. In the meantime, new lockdown restrictions were introduced.
However, embattled South Africa’s retail Steinhoff International announced a 7% increase on Friday in their half-year core earnings. Coal miner Wescoal also reduced their losses in their 2021 fiscal year.
