JSE slips as banking jitters resurface Fears about the stability of the banking sector and the broad

The JSE was weaker on Wednesday morning, with its global peers mostly down after a disappointing earnings report from First Republic Bank reignited concerns about the broader banking sector.

Shares of First Republic Bank tumbled more than 49% after the regional bank posted its latest quarterly results, saying that deposits dropped 40% to $104.5bn in the first quarter, but had since stabilised. First Republic will also be trimming expenses, including slashing headcount by 20%- 25% in the second quarter.

Bloomberg also reported that the bank was trying to sell as much as $100bn worth of loans and securities to restructure its balance sheet.

First Republic Bank has been closely watched after investors grew concerned it could face the same fate as Silicon Valley Bank and Signature Bank, whose closures set off an industry crisis in March. According to Bloomberg, First Republic shares have collapsed more than 93% so far in 2023.

“Fresh fears around the stability of the banking sector and the broader US economy have put investors on edge and fuelled risk-off behaviour,” said Citadel Global director Bianca Botes.

“In addition to the concerns around the banking sector, US consumer confidence has dropped to a nine-month low, adding to concerns that the country will enter a recession towards the end of the year,” added Botes.

At 10.25am, the JSE all share had lost 0.52% to 77,487.51 points and the top 40 was down 0.59%. Banks had lost 0.77%, financials 0.72%, industrials 0.7% and precious metals 0.29%.

At the same time in Europe, France's CAC 40 had lost 1.01% and Germany's DAX 0.93%.

Earlier in Asia, the Shanghai Composite was unchanged and Hong Kong’s Hang Seng fell 0.90%, while Japan’s Nikkei was little changed.

At 9.50am, the rand had strengthened 0.21% to R18.2882/$, while it had weakened 0.25% to R20.1475/€ and 0.15% to R22.7661/£. The euro was 0.37% firmer at $1.1014.

Gold was little changed at $1.997.06/oz, while platinum gained 1.67% to $1.101.10/oz. Brent crude was 0.84% firmer at $81.26 a barrel.