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We take a look at the Johannesburg Stock Exchange (JSE) trading statistics for the week ending 20 September 2019 and compare the numbers to that of a year ago.
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Trading statistics for the week ended 20 September 2019
Last week Friday we covered the latest weekly world market wrap from Peregrine Treasury Services. Below an extract from the article pertaining to the latest in South African equities.
SOUTH AFRICAN EQUITY
An ultimately negative week was witnessed on local shores, as the only positive day seemed to be Monday which tended to be largely influenced by the MSCI rebalancing implemented on the day. With the oil price ‘going through the roof’ over the weekend, while the South African rand held relatively steady against most major countries, there was really no other reason for local equity markets to have been so strong on Monday. So what happened with regard to the rebalancing?
Major moves seen with regard to the rebalancing was Prosus (recently unbundled from Naspers) taking Sappi’s seat on the JSE Top 40 index. Sappi was seen dropping around 7% on the day, with R250 million being traded through it.
After a strong Monday, seeing most local indices delivering more than 1%, Tuesday took the role of the ‘Big Bad Wolf’, quickly wiping the smiles off of investor’s faces. On Tuesday, local markets were battered relatively hard. Some of the numbers were as follows:
EOH continues to fight an uphill battle, as a trading statement released on Wednesday alluded to further loss expectations, which came as quite a surprise to the market. The potential extent of the loss per share, over the last financial period, starts to point towards a more fundamentally dire situation within EOH. Although the general investor knows that EOH has been trying to carve a new way forward, given the investigations into potentially corrupt historical transactions, the weight of losing client confidence and trust may now start to take effect more materially, should such bitter-tasting announcements continue to be released.
Even though the share price reacted with a swift 13.00% drop on the announcement, it actually recovered back to the day’s opening price of around R12.70 relatively quickly. The 15 October release of the financial results may provide investors with a more certain idea of “where-to next” for EOH, given that the legal team investigating the potentially questionable transactions may provide more transparent insight to the company’s past. Until then, not much action should be expected from the share price. On Friday morning, EOH opened the trading day at R12.35 per share.
Comair (COM) released a surprisingly strong set of results, for the year ended 30 June 2019, which were materially assisted by a payment received from South African Airways with regard to SAA breaching the Competition Act in 2005. Overall, the company actually performed relatively well, when stripping out this once-off payment, however there were still one or two issues which continued to create a dragging-effect on the company:
Read the full weekly market wrap here.
SOUTH AFRICAN EQUITY
An ultimately negative week was witnessed on local shores, as the only positive day seemed to be Monday which tended to be largely influenced by the MSCI rebalancing implemented on the day. With the oil price ‘going through the roof’ over the weekend, while the South African rand held relatively steady against most major countries, there was really no other reason for local equity markets to have been so strong on Monday. So what happened with regard to the rebalancing?
- R37 billion volume traded through the JSE All Share Index on the day (2019 daily average: R19.68 billion)
- Net foreign investor purchasing of SA Inc. (local companies generating revenues primarily in rands) came to around R6 billion
- Foreigners traded about 30% of the entire SA equity market on the day.
- Foreign interest on the day was focused on the following sectors:
- Just under R3 billion worth of consumer sector stocks were purchased
- Just over R2 billion worth of financial sector stocks were purchased
- Local funds were one of the only sectors to have been sold out of
Major moves seen with regard to the rebalancing was Prosus (recently unbundled from Naspers) taking Sappi’s seat on the JSE Top 40 index. Sappi was seen dropping around 7% on the day, with R250 million being traded through it.
After a strong Monday, seeing most local indices delivering more than 1%, Tuesday took the role of the ‘Big Bad Wolf’, quickly wiping the smiles off of investor’s faces. On Tuesday, local markets were battered relatively hard. Some of the numbers were as follows:
- All Share and Top 40 indices: down around 1.60%
- Resources index: down 0.47%
- Industrial index: down 1.89%
- Financial index: down 2.64%
EOH continues to fight an uphill battle, as a trading statement released on Wednesday alluded to further loss expectations, which came as quite a surprise to the market. The potential extent of the loss per share, over the last financial period, starts to point towards a more fundamentally dire situation within EOH. Although the general investor knows that EOH has been trying to carve a new way forward, given the investigations into potentially corrupt historical transactions, the weight of losing client confidence and trust may now start to take effect more materially, should such bitter-tasting announcements continue to be released.
Even though the share price reacted with a swift 13.00% drop on the announcement, it actually recovered back to the day’s opening price of around R12.70 relatively quickly. The 15 October release of the financial results may provide investors with a more certain idea of “where-to next” for EOH, given that the legal team investigating the potentially questionable transactions may provide more transparent insight to the company’s past. Until then, not much action should be expected from the share price. On Friday morning, EOH opened the trading day at R12.35 per share.
Comair (COM) released a surprisingly strong set of results, for the year ended 30 June 2019, which were materially assisted by a payment received from South African Airways with regard to SAA breaching the Competition Act in 2005. Overall, the company actually performed relatively well, when stripping out this once-off payment, however there were still one or two issues which continued to create a dragging-effect on the company:
- The grounding of the Boeing 737 MAX – of which the company had purchased two (overall impact of the grounding currently costs COM around R195 million); and
- Problems with maintenance scheduling and inventory management at SAA Technical.
- Revenue up 9% to R7.1 billion from a previous R6.5 billion
- Profit up by 184% due to R1.1 billion payment from SAA and R168 million worth of interest thereon
- Earnings per share (EPS) was up 175% to R1.92 per share vs last year’s R0.69 per share
- Headline EPS was up 184% to R1.97 per share vs 2018’s R0.69 per share
Read the full weekly market wrap here.
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JSE Trading Statistics for the week ending 20 September 2019
Number of trades:
Number of trades (2019): 2 182 087
Number of trades (2018): 1 680 093
% change year on year: 29.88%
Volume traded:
Volume traded (2019): 2 674 082 000
Volume of traded (2018): 3 001 774 000
% change year on year: -10.92%
Value of trades:
Value of trades (2019): R212 693 278 000
Value of trades (2018): R162 929 634000
% change year on year: 30.54%
Foreign purchase/selling:
Net sales/Purchases (2019): -R954 252 000
Net sales/Purchases (2018): -R5 717 805 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2019): -R62.276 billion
Net sales/Purchases (2018): -R14.410 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R14.410 billion for the YTD while this year they have been net sellers to the tune of -R62.276 billion in the year to date (YTD). That is a R47.866 billion difference between the net buying/selling position last year compared to this year as foreigners accelerate their selling of SA's listed stocks.
A clear sign that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2019): R17.728 trillion
Market Cap (2018): R14.663 trillion
% change year on year: 21.15%
So as shown in the JSE total market capitalisation above, the overall stock market of South Africa has increased significantly over the course of the last 12 months (and it would have been even higher if it wasn't for the tariff war between the USA and China). The markets had a particularly positive start to the year, with all four months of the year ending in positive territory.
While May ended the month strongly in the negative. June fought back and ended the months 4.55% in the green. But July spoiled the party by becoming the second negative month of the trading year. August become the third negative trading month of the year. But so far for September 2019 the All Share Index is positive.
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2019 will be:
Number of trades:
Number of trades (2019): 2 182 087
Number of trades (2018): 1 680 093
% change year on year: 29.88%
Volume traded:
Volume traded (2019): 2 674 082 000
Volume of traded (2018): 3 001 774 000
% change year on year: -10.92%
Value of trades:
Value of trades (2019): R212 693 278 000
Value of trades (2018): R162 929 634000
% change year on year: 30.54%
Foreign purchase/selling:
Net sales/Purchases (2019): -R954 252 000
Net sales/Purchases (2018): -R5 717 805 000
So year to date (YTD) foreigners have been net seller/buyers:
Net sales/Purchases (2019): -R62.276 billion
Net sales/Purchases (2018): -R14.410 billion
So a year ago foreigners were net sellers of SA listed shares to the value of -R14.410 billion for the YTD while this year they have been net sellers to the tune of -R62.276 billion in the year to date (YTD). That is a R47.866 billion difference between the net buying/selling position last year compared to this year as foreigners accelerate their selling of SA's listed stocks.
A clear sign that foreign capital is still leaving South African equities in vast amounts. This while the South African government continues to try and convince investors that South Africa is open for business. But the large scale corruption, poor government service delivery, slow economic growth, restrictive labour laws, worries about property rights, crime and general public disorder in the forms of strikes and looting are keeping potential investors away from South Africa.
JSE total market capitalisation:
Market Cap (2019): R17.728 trillion
Market Cap (2018): R14.663 trillion
% change year on year: 21.15%
So as shown in the JSE total market capitalisation above, the overall stock market of South Africa has increased significantly over the course of the last 12 months (and it would have been even higher if it wasn't for the tariff war between the USA and China). The markets had a particularly positive start to the year, with all four months of the year ending in positive territory.
While May ended the month strongly in the negative. June fought back and ended the months 4.55% in the green. But July spoiled the party by becoming the second negative month of the trading year. August become the third negative trading month of the year. But so far for September 2019 the All Share Index is positive.
See our JSE Calendar tracker for more.
Key issues for the market and South Africa during 2019 will be:
- Exchange Rate (seems to be see sawing a lot. See our exchange rate page)
- The impact of the 25 bp cut announced by the South African Reserve Bank (SARB) monetary policy committee and the impact will have on the Rand as well as the South African economy on the medium to long term
- ESKOM's financial woes and weaker than expected tax collections is forcing government to borrow more money, which is negatively affecting the South African exchange rate, and potential credit rating cuts coming for South Africa's government which pushes up the cost of borrowing, and this at a time when government is borrowing more and more
- Expropriation of land without compensation (EWC)
- Potential expansionary monetary policy coming considering the very weak economic growth numbers
- Sluggish economic growth. See our SA GDP page and high levels of unemployment
- Tax increases announced in the budget speech and how it will affect South African consumers spending patterns and potentially increase inflation levels as taxes were increased by rates higher than inflation. In particular lack of bracket creep relief and higher sin taxes, fuel levies and road accident fund levies will hurt consumers.
- Protests and violence in the major cities of South Africa is starting to affect investor confidence even more.
- Attacks on Saudi Arabian crude oil facilities and rising tensions in the Gulf region as the US blames Iran for these attacks.