THE JSE closed a torrid week 1.87% lower on Friday at 48,067.5 points, hitting a four-month low following intensifying negative sentiment towards the country as an investment destination.
The Johannesburg Stock Exchange (JSE) building in Sandton. It has operated as a market place for the trading of financial products for nearly 125 years.
The blue-chip top 40 index was 1.56% lower at 43,558.3 points.
Cash started pouring out of the country following sovereign debt rating downgrades by leading agencies a week earlier, but the flow quickly turned into a torrent after President Jacob Zuma replaced Nhlanhla Nene with cabinet greenhorn Des van Rooyen as finance minister.
Mr Zuma has yet to explain his actions.
It was, however, the banks and financials which took the worst of the punishment on Friday, with the banking index plunging for consecutive days to 5,340.31 from Thursday’s 5,669.93 points. Platinums were 2.16% lower and industrials gave back 1.01%. The gold index was up 6.79%, while resources were flat (-0.06%).
Bonds, which are usually considered to be a relatively safe asset, have also weakened to their worst levels along with the rand’s value against hard currencies. This means investors fleeing South African equities are taking their funds altogether out of the country.
Looking ahead, First National Bank economists said on Friday that there was a good chance that the US Federal Reserve would raise interest rates next week. “If that does transpire, the rand and SA bonds could come under further pressure,” they said. “Hold onto your hats, it’s going to be a volatile festive season.”
European markets were also lower as commodity prices continue to put a damper on sentiment. In late trade, the London FTSE 100 was down 2.19%, the Paris CAC 40 had lost 2.31% and the German DAX 30 was 2.67% lower.
Among individual shares on the JSE, Nedbank shed 5.78% to R169, FirstRand lost 8.3% to R35.57 and Sanlam slumped 8.32% to R47.03
At noon on Friday Barclays Africa had plunged 12.32% to R115.56, but recovered some of that to close at R127.84, down 3%.
Anglo American lost a further 2.25% to close at R70.91.
British American Tobacco was 2.28% higher, closing at R869.87, with gains appearing to come from the weaker rand.
Source: BDLive