JSE reaches record highs ahead of key data this week

Yesterday, the Johannesburg Stock Exchange closed on a high note, reaching a new all-time high in a week that the market expects inflation numbers and the interest rate decision to be announced.

The JSE FTSE all-share index breached 70,000 points on Monday, reaching an all-time high of 70,327 points before closing at 70,091.

Top performing stocks on the day included Shoprite Group and Richemont. They both reached 52-week highs on a day that the overall market closed 0.24% up.

Shoprite recently released a voluntary operational update that showed overall sales growth for the three months to September 2021. Its core business, Supermarkets RSA, increased sales by 11.6% for the period.

What’s ahead this week

On Wednesday, the South African Reserve Bank (SARB) will release the country’s latest inflation rate. Analysts expect this to remain at 5%. However, recent fuel price increases and other input costs could lead to a further rise in inflation.

On the same day, September retail sales numbers are expected to be released. In August, retail sales shrank by 1.3%. Retail sales are expected to end the year on a high note, given the upcoming Black Friday promotions and Christmas shopping.

The SARB will announce its interest rate decision on Thursday, which is expected to be kept at 3,5%. Governments across the world are still using loose monetary policies to keep borrowing high and encourage spending to counter the decline caused by the pandemic.

An unchanged policy rate will keep the market liquid. That could see the JSE maintaining the upward momentum for the foreseeable future. Investors have an excellent incentive to buy, given a recent spate of positive results from listed companies.