The oil price slump triggered massive instability in global markets, with emerging market currencies hit hard. But the rand staged an impressive recovery – after almost breached R17/$ early on Monday, it was last trading at R15.96/$, R20.95 to a pound and R18.17 to a euro.
Johannesburg Stock Exchange
The JSE’s all share index slumped by more than 5% by mid-morning on Monday. Asian markets ended around 6% lower, while the Australian stock exchange lost 7%. European markets were also sharply lower.
Standard Bank, FirstRand and Sanlam were among financial stocks that lost more than 5% of their value shortly after the JSE opened although they started recovering during the day.
Shoprite declined by more than 7%, as did Aspen.
“It’s a combination of the real economic impact expected and sentiment turning very negative. Investors are grappling with the expected impact of the coronavirus on different companies,” said Protea Capital Management CEO, Jean Pierre Verster.
Verster said while Sasol’s decline was obviously because of the oil price, Aspen could be impacted by supply chain issues as the company struggles with the availability of active pharmaceutical ingredients in India, as well as idle production lines in China.
“Shoprite has significant exposure to African economies like Angola and Nigeria which produce oil,” he added.
Musa Makoni, a trading specialist at Purple Group, says investors are dumping stocks, which are riskier assets, in favour of bonds which are usually considered safe haven in times of global crisis.
While the gold price was flat at $1,688.oz, gold shares rallied. Harmony was up more than 7%.
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