Markets WRAP: Rand closes at R14.2990/$

The rand closed at R14.2990/$ after trading in a range of 14.2370-14.4030.

Andre Botha, senior currency dealer at TreasuryONE, noted that the ZAR was hovering below the R14.40 level after Friday afternoon's sell-off and was likely to be fairly range-bound for the week, despite the expected volatility around the US Fed meeting. 

USDZAR 14.2990

EURUSD 1.1366

EURZAR 16.2442

GBPUSD 1.2643

GBPZAR 18.0692

AUDZAR 10.2916

CADZAR 10.6505

CNYZAR 2.0712

ZARJPY 7.8720

CHFZAR 14.3999

R186 9.12%

US 10 Year 2.85%

JSE -0.98%

FTSE -0.61%

S&P 500 0.84%

Gold 1 246.71 

Plat 785.50 

Plad 1 251.20 

Rhod 2 505.00 

Irid 1 470.00 

Ruth 268.00 

Copp 6 043.00 

Brent 58.35 

Gold ZAR 17 824.09 

Plat ZAR 11 226.64 

Brought to you by TreasuryONE

The warning signs of 2019 are lighting up for the UK economy as Brexit comes to a head. Retailers are complaining about an abysmal holiday season, house prices are weakening, businesses are holding back investment and the swooning pound is fuelling inflation.

With just a few months until the March 29 deadline to exit the world’s biggest trading bloc, there’s no clarity on whether Britain will crash out of the European Union without a divorce deal.

"You obviously need demand" for companies to do well, said Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors in a Bloomberg Television interview. "With what’s happening in the UK" right now, "it’s not an environment where people feel very confident."

Naspers announced on Tuesday that its shares have been approved to trade on the local A2X stock exchange as a secondary listing with effect from December 27, 2018.

The global media giant, which is the third largest company by market capitalisation on the Johannesburg Stock Exchange, said its primary listing on the JSE would be unaffected. 

A2X, which has been active since October 2017, provides secondary listings for SA companies.

The inclusion of Naspers on the A2X platform brings the number of companies listed there to 15 with a combined market capitalisation of almost R2trn, according to A2X.

Chinese equities declined as President Xi Jinping’s speech on the country’s four decades of reforms did little to lift sentiment. The Shanghai Composite Index closed 0.8% lower, paring some losses.

The tech-heavy ChiNext gauge fell 0.5% and Hong Kong’s Hang Seng Index dropped 1.1% as of 3:30 pm local time, wiping out an early advance.

Trading volume on the Shanghai gauge was almost 30% below its 30-day average, according to data compiled by Bloomberg.

With no specific policies mentioned by Xi, "Investors should wait for the Central Economic Work Conference for a policy tone and measures from the two meetings early next year," said Dai Ming, a Shanghai-based fund manager with Hengsheng Asset Management. "It takes time for these policies to be rolled out and really have an impact." 

The local bourse fell in early trade on Tuesday morning, in line with global markets. 

The JSE All-Share was trading at 50 962,18 at 11:20, down -1.16%.  Financials and Industrials were both down, with only Resources in positive territory. 

The rand firmed by 13 cents against the dollar in early trade on Tuesday morning, to change hands at R14.26/$ at 10:48, up 0.89% on the day. 

This comes as the greenback weakened slightly against a basket of its currency peers. The spot dollar index - its value relative to a basket of six foreign currencies - was 96.92 just before 11:00, down 0.2%.

Andre Botha, senior currency dealer at TreasuryONE, said in a commentary on Tuesday morning that the dollar's relative weakness may be linked to the Fed.

"Major US equity indices all closed lower on Monday as markets expect another hike from the Fed this week.

"Nasdaq, Dow Jones and the S&P 500 all lost over 2% yesterday and the sell-off in stocks continued this morning in the Asian markets with the Nikkei, Hang Seng and Shanghai Composite all losing ground.

"The USD, on the other hand, lost some ground as a dovish tone is expected from the Fed over the economic outlook for next year. Concerns around future oil demand amid weakening global economic growth and doubts over the impact of planned production cuts led by OPEC has led to the price of Brent Crude falling below $60/barrel," he said.   

Traders in African markets have had a year to forget, and there are signs the rout’s not over yet.The continent’s stocks and bonds have performed worse than those of all other emerging-market regions in 2018, reversing their outperformance of last year.

The selloff has left equities in nations such as South Africa, Egypt, Nigeria and Kenya at or near their cheapest levels in years. And the yields of Eurobonds issued by governments have soared to a point last seen in early 2016, when investors fretted China’s economic slowdown was gaining momentum.But bargain-hunters won’t necessarily jump in next year.

Risks abound from tense elections in the two biggest economies - Nigeria and South Africa - to low oil prices, potential credit-rating downgrades and the prospect of sovereign defaults.

Tokyo stocks opened lower on Tuesday, extending losses on Wall Street, as investors looked ahead to meetings of the US and Japanese central banks.

The benchmark Nikkei 225 index was down 1.07% or 230.76 points at 21 276.12 in early trade, while the broader Topix index was down 1.14% or 18.19 points at 1 576.01.

"Following falls in US shares, investors remain cautious about market prospects," said Okasan Online Securities in a commentary.