EMELIA SITHOLE, Johannesburg | Friday
STRONG local and offshore demand for South African blue-chip issues lifted the Johannesburg bourse to its highest close in more than 11 months on Thursday and dealers see the market staying strong on Friday.
However, Northam Platinum went against the strong tone, falling sharply after it launched a bid for smaller miner Kroondal Platinum.
Northam dropped 8.68% to R15.25 as the market fretted over how it planned to finance its R40 a share offer to Kroondal shareholders. Its offer is significantly higher than its Australian rival Aquarius’ R32 a share bid for Kroondal.
The JSE Securities Exchange suspended Kroondal’s listing at the request of the company’s directors following Northam’s announcement. Before the suspension, Kroondal paper was last 0.91% up at R33.30, building onto gains of more than 4.0% notched up on Wednesday, triggering rumours of a counter-bid to Aquarius’.
Platinum analysts said the significantly higher offer raised concerns about how Northam would finance the deal.
On the broader bourse, the benchmark all share index ended up 0.65% at 8803.4 with turnover of R2.4bn.
The market, which was directionless for most of the morning session, picked up its pace later in the day as US futures indicated a firmer Wall Street start later.
However, another dealer said caution before the central bank’s statement following its monetary policy committee meeting could keep early volumes subdued.
Johannesburg’s all share component was given momentum by continuing strong demand for blue-chips such as diamond giant De Beers, financial services group Old Mutual, luxury group Richemont and market bellwether Anglo American.
De Beers rose 2.98% to a new peak of R242 as the market welcomed confirmation of its gem retail joint venture with French fashion house LVMH.
De Beers, like other rand hedge issues, is also benefiting from a weakened rand. The rand has weakened more than 3% on a trade-weighted basis this year.
Swiss-based group Richemont gained 3.06% to R209 after it defied market fears about its Christmas sales, reporting a 21% increase in its fiscal third quarter sales, a less pronounced slowdown than widely expected.
Elsewhere on the market, sugar producer Tongaat-Hulett slumped by 3.70% to R43 on lingering concern over its failed bid for sugar firm Transvaal Suiker Beperk. – Reuters