Positive post-election investor sentiment sees JSE hit record high
TLDR
- Johannesburg Stock Exchange (JSE) hits record high, surpasses 81,000 points mark led by banking and financial services stocks
- Surge driven by optimism around South Africa's government of national unity (GNU), resulting in R36 billion in trade
- SA Inc. stocks dominate the rise, with the JSE experiencing its largest single-day surge of the year
The Johannesburg Stock Exchange (JSE) broke through the critical 81,000 points mark this week, reaching a record high on Wednesday's inauguration day. The surge was driven by banking, financial services, retail, consumer goods, and consumer services stocks, primarily SA Inc. stocks.
Africa’s largest bourse by market capitalization hit 81,364 points for the first time, led by SA Inc. stocks. This wave of optimism resulted in approximately R36 billion ($2 billion) in trade on Tuesday, closing 3.5% higher.
This was the JSE's largest single-day surge this year, fueled by positive sentiment surrounding South Africa's planned government of national unity (GNU). The GNU is expected to include parties such as the ANC, DA, IFP, PA, Good party, PAC, and potentially others.
Key Takeaways
The JSE surpassed the significant 80,000 points level on May 20, just before the elections, and again in January 2023. On Tuesday, the bourse closed at 79,749, with the Financials Index surging nearly 7%. The rand also strengthened below R18 against the US dollar yesterday morning, reaching around R17.92 at one point, a 0.5% gain. This followed a more than 1.1% increase. Expectations are high that the rand will continue to strengthen and test the next psychological level of R17 to the dollar after President Cyril Ramaphosa announces the GNU cabinet. Ramaphosa is expected to reveal the new cabinet later this week following his inauguration yesterday. On Tuesday, Bloomberg reported that the FTSE/JSE Alsi was the best performer among 92 global equity benchmarks tracked by Bloomberg.
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