/ 27 May 2008

JSE weaker on poor GDP data

South African stocks were lower at midday on Tuesday, pressured by below-forecast gross domestic product (GDP) data, which showed that the quarterly economic growth rate slowed to 2,1%, traders said.

At 12.02pm, the all-share index was down 0,71%. Resources fell 1,01%, while the gold- and platinum-mining indices were off 0,42% and 0,72% respectively.

Banks gave up 0,86%, financials slipped 0,50% and industrials weakened 0,31%.

The rand was bid at 7,73 to the dollar from 7,69 when the JSE closed on Monday, while gold was quoted at $923,05 a troy ounce from $927,60/oz at the JSE’s last close.

“The GDP data is a shocker and it will place more pressure on banks and financials ahead of inflation data later this week,” said Hennie Fourie, a trader at Cape Town-based PSG Konsult.

South Africa’s real GDP at market prices on a quarter-on-quarter seasonally adjusted annualised basis rose by 2,1% in the first quarter of 2008 from 5,3% in the fourth quarter of 2007, Statistics South Africa said on Tuesday.

This is the lowest growth since the third quarter of 2001, when the seasonally adjusted real GDP was 1,1%, and it is below the 2,6% growth rate the market had expected.

On the resource index, Anglo American was down R5,35, or 1,02%, at R521,60 and BHP Billiton lost R5,24, or 1,68%, to R307,50.

Petrochemicals group Sasol shed R3,86 to R492,89.

Among gold miners, AngloGold Ashanti was off R1,38 to R306,02, Harmony dipped 64 cents to R97,37 and Gold Fields edged down 20 cents to R106.

Platinum miner Anglo Platinum declined R19, or 1,34%, to R1 400 and Impala Platinum lost R1,50 to R355,50.

Among industrials, brewer SABMiller was up R3,01, or 1,53%, to R200,01 on the back of vague weekend reports that Belgium-headquartered brewer InBev might seek a tie-up with the group, which also trades in London.

Pioneer Foods was unchanged at R28. Pioneer Foods earlier reported diluted headline earnings per share of 140 cents for the six months ended March from 127,7 cents a year ago.

An interim dividend of 30 cents was declared — up 11,1%.

“Pioneer Foods’s results was good, but they still have a price-fixing scandal hanging over them,” said Fourie.

Pressured by poor economic growth data and prospects of a worsening inflation outlook ahead of inflation data this week, banks and financials were mostly down.

Standard Bank was down 90 cents, or 1,03%, to R86,55, Nedbank fell R1,99, or 1,90%, to R102,50, FirstRand was off 18 cents, or 1,19%, to R15 and Old Mutual gave up 21 cents, or 1,21%, to R17,09.

Elsewhere, telecoms group MTN tumbled R6,91, or 4,67%, to R141,16 on fresh rumours that it might turn a hunter for India’s Reliance Communications.

“The market does not like the way the story is developing,” said Fourie.

Talks between MTN Group and Reliance Communications were focusing on a structure that would ultimately see the South African operator acquiring India’s second-largest cellphone operator to create a top-10 global mobile industry player, Dow Jones Newswires reported on Tuesday, citing sources familiar with the situation.

Rival Telkom was up R1,18 to R129,68. Cellphone group Vodacom, of which Telkom owns 50%, said earlier it had increased its total customers by 12,7% to 34-million in the year ended March. — I-Net Bridge