Publications
Partners
Johannesburg - Calmness has returned to the JSE on Thursday morning with banking shares recovering, but by midday it was still not clear which way the market was going.
By midday, the All-share-index was virtually unchanged as it traded only 0.10% higher on 51 489 points, while the Top 40-index also gained only 0.10% to 46 361 points.
The positive news from the morning’s trading was that banking shares recovered from the hammering of the last few days after the major banks were downgraded by Moody’s, but the Resources index was still losing ground led by BHP Billiton [JSE:BIL].
The Financial index was 0.93% higher after a weaker start, but the Resources index lost 0.80% and the Gold index 1.01%. Nothing much happened with industrial shares and the index gained only 0.35%.
The share prices of the four big banks opened lower again on Thursday, but recovered well after a statement by Standard & Poor’s, the other big credit rating agency, that it is not considering to downgrade the banks.
From the agency’s statements it is clear that it agrees with local commentators and the South African Reserve Bank that Moody’s is wrong in its assessment of the local banking sector. Moody’s cut the banks' credit rating for local deposits with one notch.
Moody’s decision is based on a perception that the Reserve Bank is not prepared to protect depositors fully in a crisis, based on the Reserve Bank’s rescue plan for African Bank which entails that investors will lose 10% of their investment.
Standard & and Poor’s however said that the rescue plan was in line with global best practices.
The agency said government support for the banking sector are not taken into consideration in their measurements, as the credit worthiness of the banking sector is relatively higher in comparison to the government.
The banking sector’s financial position is according to Standard and Poor’s really good compared to the economy they operate in.
The big banks all started the day lower, but by midday on Thursday they were all more than 1% stronger than Wednesday's close. Barclays Africa [JSE:BGA] rose 1.42% to R167.35, while Nedbank [JSE:NED] improved with 1.52% to R234.81. FirstRand [JSE:FSR] was 1.33% higher on R43.31 and Standard Bank [JSE:SBK] 1.30% higher on R139.59.
In the resources sector BHP Billiton [JSE:BIL] continued its up and down ride of the last week. After the share price rose sharply on the prospects of the unbundling of some of the group’s non-core assets, the price dropped sharply when the announcement of the unbundling did not include the share buyback that was widely anticipated.
On Thursday, the share price was down 0.72% at R350.60, but it is only 0.5% lower for the last seven days.
Anglo American [JSE:AGL] gave up 1% to trade at R280.80.
Shoprite [JSE:SHP], which dropped sharply earlier this week after results that disappointed the market, was by midday only 0.14% lower on R141.80. The share price was however quite volatile and the price moved between a high of R142.20 and a low of R140.24.
The retail group’s price is now 10.1% lower than a week ago.
By midday, the All-share-index was virtually unchanged as it traded only 0.10% higher on 51 489 points, while the Top 40-index also gained only 0.10% to 46 361 points.
The positive news from the morning’s trading was that banking shares recovered from the hammering of the last few days after the major banks were downgraded by Moody’s, but the Resources index was still losing ground led by BHP Billiton [JSE:BIL].
The Financial index was 0.93% higher after a weaker start, but the Resources index lost 0.80% and the Gold index 1.01%. Nothing much happened with industrial shares and the index gained only 0.35%.
The share prices of the four big banks opened lower again on Thursday, but recovered well after a statement by Standard & Poor’s, the other big credit rating agency, that it is not considering to downgrade the banks.
From the agency’s statements it is clear that it agrees with local commentators and the South African Reserve Bank that Moody’s is wrong in its assessment of the local banking sector. Moody’s cut the banks' credit rating for local deposits with one notch.
Moody’s decision is based on a perception that the Reserve Bank is not prepared to protect depositors fully in a crisis, based on the Reserve Bank’s rescue plan for African Bank which entails that investors will lose 10% of their investment.
Standard & and Poor’s however said that the rescue plan was in line with global best practices.
The agency said government support for the banking sector are not taken into consideration in their measurements, as the credit worthiness of the banking sector is relatively higher in comparison to the government.
The banking sector’s financial position is according to Standard and Poor’s really good compared to the economy they operate in.
The big banks all started the day lower, but by midday on Thursday they were all more than 1% stronger than Wednesday's close. Barclays Africa [JSE:BGA] rose 1.42% to R167.35, while Nedbank [JSE:NED] improved with 1.52% to R234.81. FirstRand [JSE:FSR] was 1.33% higher on R43.31 and Standard Bank [JSE:SBK] 1.30% higher on R139.59.
In the resources sector BHP Billiton [JSE:BIL] continued its up and down ride of the last week. After the share price rose sharply on the prospects of the unbundling of some of the group’s non-core assets, the price dropped sharply when the announcement of the unbundling did not include the share buyback that was widely anticipated.
On Thursday, the share price was down 0.72% at R350.60, but it is only 0.5% lower for the last seven days.
Anglo American [JSE:AGL] gave up 1% to trade at R280.80.
Shoprite [JSE:SHP], which dropped sharply earlier this week after results that disappointed the market, was by midday only 0.14% lower on R141.80. The share price was however quite volatile and the price moved between a high of R142.20 and a low of R140.24.
The retail group’s price is now 10.1% lower than a week ago.
