EMELIA SITHOLE, Johannesburg | Tuesday
SOUTH African stocks pranced to an 11-month peak on Monday, buoyed by further gains in technology, media and telecoms issues as well as continuing strength in platinum shares.
Mobile phone operator M-Cell leapt 6.60% to end at R26.65 on healthy volumes of 1.1m shares, pushing up controlling shareholder Johnnic 5.22% to R88.70.
Dealers said hopes that M-Cell would get a licence to operate a mobile phone service in Nigeria helped to buoy M-Cell and Johnnic. M-Cell’s pickings lifted the telecom index 5.71% to 492.1.
The benchmark all share index scooped up 68.5 points or 0.79% to 8,730.7, its highest level in 11 months but volumes were light at R1.1bn rands’ worth of shares.
The closure of the US markets for Martin Luther King Jr Holiday was partially responsible for the subdued dealings.
Industrials gained 1.9% to 8 541.3, largely buoyed by demand for blue-chip TMTs and resources stocks.
IT heavyweight Dimension Data moved up 4.13% to R52.90, with indications of a rally in the tech-rich Nasdaq when U.S. markets reopen on Tuesday helping to inspire confidence in tech issues.
Diamond giant De Beers finished at R225.40, unchanged from Friday’s closing levels. Dealers said news of an imminent diamond retailing tie-up with French luxury goods company LVMH already factored into its share price.
BoE Securities downgraded its recommendation on De Beers to ”reduce” from buy.
”It (De Beers) has reached our 12-month price target. We had a price target of R235, it’s nearly there and we believe that the slowdown in the U.S. is going to affect the sales there,” said Greg Potter, a trader at BoE.
BoE said in a report an expected drop in the size of its first sight being held this week was indicative of the concern that De Beers had about the state of the markets following what BoE called poor holiday season sales in the United States.
BoE expects a 12.5% drop in De Beers’ first sight this year to $525m. On the Johannesburg bourse, dealers expected the market to stay on positive ground with continuing strength in platinums and TMTs seen providing support on Tuesday. – Reuters