The South African bourse slipped at the start on Monday, as rand hedge and some gold stocks felt the brunt of a firm rand and a rally in financial stocks fizzled out, dealers said.
South Africa’s top gold producer AngloGold sheared almost two percent or R11,92 to R560 at 0800 GMT, on the firmer rand and as the gold price opened lower in Europe. But peer Gold Fields rebounded from a Friday sell-off.
Gold Fields leapt 1,9% or 200 cents to R112 as it climbed back from the beating it took on Friday, when it tumbled eight percent on rumours — which the company denied — that it would make a bid for Canadian peer Placer Dome.
The all-share index gave up 0,3% or 30,4 points to 9,626.52 points. The value of trades was R45-million less than an hour after the open.
”Gold Fields was knocked down too hard on Friday, and we’re seeing a bit of a rally. Otherwise AngloGold is taking the sector down, and the rest of the market is giving back some of the gains it made last week,” said a trader.
Anglo American slipped 0,4% or 50 cents to R134. The global diversified miner makes up 15% of the market.
Dual-listed and commodity stocks like Anglo tend to suffer when the rand strengthens since they pay costs at home and draw earnings abroad. The rand was expected to consolidate gains on Monday, after gaining 2,6% last week.
Banks, which bounded higher on Friday with the firm rand, slipped back as investors took profits. Standard Bank shed 0,45% or 15 cents to R33,25.
Mobile phone operator MTN Group Ltd built on Friday’s gains, adding two percent or 25 cents to R12,60.
MTN leapt eight percent on Friday after releasing a trading statement saying its headline earnings per share for the six months to the end of September would be ”materially higher” than the same period last year. – Reuters