SA stocks edge up to new 10-month high

JOHANNESBURG – South African stocks inched to a new 10-month high on Friday as banks tracked European peers higher on resurgent economic recovery hopes but a weaker start on Wall Street capped gains.

The rand was steady after a week of strong gains but well off Thursday’s 11-month high, with softer global equity markets knocking demand for risk and investors nervous after sources said talks about a possible deal between MTN and Bharti Airtel deal may be extended.A deal could lead to about US$4 billion in net inflows.Traders and analysts said the threat of more strikes over wages and often-violent protests against poor services that erupted last week had not impacted sentiment, given they were still relatively small incidents.’If they become nationwide, and long term strikes (that may impact markets) … this is the normal wage negotiation period so we are used to these type of things,’ Peter said.The JSE Top-40 index of blue-chip stocks edged up 0,02 per cent to 21 579,75 points, its highest closing level since September 30, although a weaker start on Wall Street wiped out earlier gains. The All-share index rose 0,13 per cent to 23 943,98 points.’It’s another good week, ending positive. The market is moving on improved risk appetite as well,’ said Ferdi Heyneke, portfolio manager at Afrifocus Securities. ‘It’s difficult to believe we can keep going up in a straight line in the short term, so we may see some consolidation next week.’The rand was trading at 7,74 against the dollar at, flat versus its previous close in New York after slipping to 7,80 earlier.’It’s lost some ground mostly driven by the softer equities … also news of the MTN-Bharti deal being moved back two to three weeks. I think it is a done-deal but the market got a bit nervous about that,’ Citigroup trader Paul Peter said.Four sources familiar with the deal told Reuters talks may be extended to iron out regulatory and structural issues.Analysts said riots earlier in the week had been confined to a few townships and had not disrupted any major routes. The rand has notched up gains on the greenback of about four per cent last week and more than 20 per cent for the year.On the bourse, financials took their cue from banks in Europe, which gained on better-than-expected economic data.Investec gained 0,67 per cent higher at N$52,55 rand after it said earnings fell in the first quarter but reported no nasty surprises and said it had plenty of cash. Morgan Stanley raised its price target.Other financials also firmed, with Standard Bank up 0,52 per cent and FirstRand 0,65 per cent higher. Insurer Sanlam pushed up 2,82 per cent to N$19,72.Some diversified miners also fared well for a second session as copper hit a nine-month high on buoyant demand, with BHP Billiton climbing 0,87 per cent to N$198,32 rand, while Lonmin surged 5,79 per cent.Government bonds slipped, adding to a weaker trends sparked by news the government had increased its bond issuance for this week, signalling extra supply in the market.Investors may also be wary ahead of a string of data this week, including consumer and producer inflation and credit and money supply data.The yield, which moves inversely to the price, on the 2015 bond was up four basis points for the session at 8,585 per cent, while the 2036 yield rose the same margin to 8,665 per cent.- Nampa-Reuters