After a strong start, the JSE Securities Exchange surrendered some of its gains and was trading mixed at noon on Tuesday. While BHP Billiton led the market’s upside, banks, retailers and gold stocks were under pressure on the downside.
At noon, the all share index was up 0,12%. Resources were 0,88% stronger and the platinum mining index had picked up 0,66%. Industrials and financials fell 0,19% and 0,51% respectively, the gold mining index slumped 1,17% and the banks index was 0,93% in the red.
The rand was quoted at 6,03 per dollar from 6 when the JSE closed on Monday, while gold was quoted at $445,38 an ounce from $447,90/oz at the JSE’s last close.
“The market has drifted off its highs. We have seen selling coming through on the retailers’ side. JD Group’s results missed estimates — retail stocks have been pushed up hard on expectations that their results would exceed estimates so JD Group’s results sent shockwaves through the market,” a dealer said.
She added that banks were also taking a breather after Absa said on Monday that UK-based Barclays’ planned offer to acquire a controlling stake in the group might not be at a premium to the current share price because the share price had already been pushed up so hard since the offer was initially made.
While a bit of weakness had come through to gold stocks because the gold price had eased, there was still a view in the market that the dollar could weaken further, sending bullion above $450/oz.
“On the positive side, BHP Billiton is up strongly. It was up over 4% in Australia on its announcement that it had bought back more shares than originally expected and is up in London,” the dealer commented.
She added that there was still demand for cellular network operator MTN Group after solid results released last week. Strength was flowing through to Telkom.
Steel producer Ispat Iscor was benefiting by strong performances by steel stocks offshore.
On the JSE’s upside, BHP Billiton surged 2,85% or R1,85 to R66,85.
Before the opening, the global resources group said that it had successfully completed the first phase of its $2-billion capital management programme through an off-market share buy back of 180,72-million BHP Billiton Limited shares, the company announced on Tuesday.
Due to strong demand, the total amount of capital repurchased by BHP Billiton under the buy-back was increased to AU$2,272-billion ($1,780-billion), representing 2,9% of the issued share capital of the BHP Billiton Group and 4,8% of BHP Billiton Limited.
The final price for the buy-back has been set at A$12,57 per share, representing a discount of 12% to the volume weighted average price of BHP Billiton Limited shares over the five days up to and including the closing date of the buy-back.
Anglo American added R1,35 to R140,90.
Impala Platinum picked up three rand to R513 and AngloPlat advanced two rand to R215.
Cellular network operator MTN Group gained 1,25% or 45 cents to R36,40 and Telkom climbed 1,73% or R1,60 to R94,20. MTN’s intraday high of R36,80 was its strongest since mid-2000.
Ispat Iscor strengthened 1,64% or one rand to R62 after trading at a best ever R62,30.
Hiveld soared 2,88% or R1,20 to a lifetime high of R43.
Health and life assurer Discovery jumped 1,12% or 20 cents to R18 after earlier touching a highest ever R18,10.
On the JSE’s downside, Gold Fields gave up 1,53% or R1,35 to R87 and Harmony was 1,51% or R1,03 lower at R67.
Services group Bidvest slid 2,09% or R1,60 to R75 and food group Tiger Brands fell 1,36% or R1,25 to R90,75.
Furniture retailer JD Group dived 3,49% or R2,17 to R59,95.
Edcon lost 1,21% or R3,04 to R249 and Foschini fell 1,88% or 69 cents to R36.
Before the opening, JD Group reported a 53% surge in headline earnings per share (heps) to 522 cents for the year ended August 31 from 340,5 cents last year.
The group declared a distribution per share of 240 cents — up 118% from last year’s 110 cents.
According to an I-Net Bridge consensus forecast, JD Group was expected to report heps of 530 cents and a distribution of 173 cents per share.
However, the group was also expected to declare a special dividend, so it also missed forecasts on this front, dealers said.
Shares to fall on the financial index included holding company Remgro, which was 1,58% or R1,40 in the red at R87.
Standard Bank slipped 1,58% or 90 cents to R56,10 and FirstRand retreated 10 cents to R12,35.
Absa was unchanged at 68.70 rand, after trading as high as 69.10 rand and as low as 68.10 rand. – I-Net Bridge