JSE faces mixed Asian markets ahead of Moody’s review

There is the possibility SA may be downgraded deeper into junk status in ratings decisions later, while sentiment is fragile globally


The JSE faces mixed Asian markets on Friday morning, amid some uncertainty around US stimulus, while locally ratings agency decisions could see SA downgraded further into junk status.  

Both Moody’s Investors Service and S&P Global Ratings are scheduled to publish their latest reviews of SA, which are likely to come after markets close.

Globally, focus is on the US, after the Treasury of that country said on Thursday it would allow certain emergency-lending programmes to lapse at year end, something which has supported the dollar, said Peregrine Treasury Solutions executive director Bianca Botes in a note.

The White House wants these funds to go back to Congress, where they can be used elsewhere, something which is finding resistance from the US Federal Reserve, which wants the programme in place to protect against financial shocks.

“Indeed, this does not help the push-pull tug of war around short-term vs long-term markets narrative at a time when it is important that all levels of government, including the Fed, at least put up the pretense of a unified front,” said Axi chief global markets strategist Stephen Innes in a note.

In morning trade Japan’s Nikkei was down 0.61%, while the Hang Seng was up 0.35%.

Tencent, which gives direction to Naspers, had fallen 1.79%.

Gold was flat at $1,867.62/oz while platinum had risen 0.78% to $955.40. Brent crude was 0.36% higher at $44.28 a barrel.

The rand was unchanged at R15.40/$.

Food producer Tiger Brands is due to release its results for the year to end-September later, expecting a fall in profits, but saying in a recent trading update it had seen sustained demand for some of its products amid the pandemic.

Restaurant group Spur is expected to report that headline earnings per share more than halved in its year to end-June, and could give details on how sit-down restaurants have recovered as SA’s lockdown conditions eased.

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