/ 5 December 2002

Rampant rand sees JSE retreat

The JSE Securities Exchange South Africa (JSE)

retreated in opening trade on Thursday as the firmer currency dragged heavyweight rand hedge stocks down.

Gold stocks in particular came under pressure as the rand acted in tandem with a softer bullion price.

At 0913, the all share index was 0,47% weaker and the gold mining index had given up 2,40%. Resources were 0,46% in the red. The ind-25 was down 0,46%, with the IT index 0,73% weaker. The financial (-0,05%) and platinum mining indices (-0,05%) were flat.

The rand was trading at 9,11 to the dollar from 9,1870 when the JSE closed on Wednesday, while gold was quoted at $321,20 an ounce, almost $2 weaker than at the JSE’s previous close.

“The stronger rand is bring resources down, which is bringing the all share down,” a dealer said.

He noted that volumes were very thin and that by 0920, only 400 shares in London-listed diversified resources group Anglo American (AGL) had changed hands. Anglo is the heaviest weighted stock on the JSE. It was down 1,30% or R1,70 at R129,50.

BHP Billiton (BIL) was 1,04% or 50 cents weaker at R47,50 and synthetic fuels group Sasol (SOL) was down 1,46% or R1,50 at R101,50.

Harmony (HAR) was the sharpest decliner on the gold mining index, losing 3,73% or R5,19 at R133,80. It was down about six rand in New York overnight. Gold Fields (GFI) gave up 2,25% or R2,50 at R108,50 and AngloGold (ANG) was 1,46% or R7,79 weaker at R525,00.

“When we saw the rand start to strengthen last week, the guys got nervous about resources. They will want to see the rand sustain its gains. Then we should see a lot more selling in that sector,” the dealer commented, referring to the low volumes.

On the indi-25, Swiss-listed luxury goods group Richemont (RCH) was under pressure, losing 1,65% or 25 cents at R16,70, while pulp and paper producer Sappi (SAP) had shed 1,86% or R2,30 to R121,20.

Financials were mixed. The upside was led by commercial banks FirstRand (FSR) and Standard Bank (SBK), with the latter 25 cents stronger at R30,85.

FirstRand firmed 6 cents to R7,51. The downside was led by life assurer Sanlam (SLM), which shed 1,48% or 12 cents to R8,00. Sanlam earlier issued a trading update in which it said an outright merger between it and ABSA (ASA), which has been the subject of an in-depth analysis over the past few months, was not viable or in the interests of Sanlam shareholders.

Sanlam also said that the difficult trading conditions experienced in the first half of 2002 continued throughout the third quarter. – I-Net Bridge