The JSE Securities Exchange South Africa (JSE) drifted weaker at the start on Friday, taking its cue from world markets. Volumes remained subdued as belligerent comments by US President George Bush regarding Iraq saw many players take to the sidelines.
By 0913, the all share index was down 0,61%. Financials were 0,83% in the red, while resources retreated 0,75%. The gold mining index was 0,69% weaker. The all share industrial and IT indices dipped 0,22% and 0,25% respectively, while the platinum mining index was unchanged.
The rand was trading at 7,9567 to the dollar from 7,9950 when the JSE closed on
Thursday, while gold was quoted at $356,20 an ounce from $354.65/oz at the JSE’s
last close.
“We are just following world markets. The Nikkei closed at a 20-year low and the Dow was down over 100 points,” a dealer said. He said that on the local front, the rand was fairly stable.
“The gold price is a bit better, but if you look at the shares, they are all down.”
The dealer said that opening volumes on the JSE had been very light, mainly due to geopolitical uncertainties over Iraq. He said that comment’s by Bush that the US would attack Iraq if deemed necessary and not wait for a UN resolution had not helped the market.
“People are also waiting for a report by UN weapons inspectors later today. The market is looking for some direction, but the trend is definitely down,” the dealer concluded.
Shares to lose ground in early trade included London-listed diversified resources group Anglo American (AGL), which shed 85 cents to R115,25. BHP Billiton (BIL) was 1,27% or 50 cents weaker at R39 — its lowest level since October 2001.
On the gold mining index, Gold Fields (GFI) was 1,37% or R1,30 weaker at R93,60 and AngloGold (ANG) was one rand weaker at R256. London-listed beverages group SABMiller (SAB) was 40 cents weaker at R48. Telecommunications company Telkom (TKG) was 15 cents in the red at R28,55, but only 241 shares had changed hands. Telkom has dominated early activity for the past three days after listing on Tuesday.
Old Mutual (OML) was again under pressure on the financial index, tumbling 3,60% or 36 cents to R9,65 — its lowest level since listing in July 1999. Old Mutual announced on Thursday it planned to raise 36-million sterling via a private placement of new ordinary shares.
The proceeds will be used to fund the payment of the second fixed installment of the payments due to Harold Baxter and Gary Pilgrim, the principals of Old Mutual’s US subsidiary, Pilgrim Baxter & Associates, under the restructuring agreement terms in relation to their revenue share agreement.
The fact that Old Mutual had to go to a bear market to raise capital was interpreted as a sign that it is short of cash.
The Wall Street Journal reports that war worries continued to rule the US stock market on Thursday, sending the Dow Jones Industrial Average to another five-month low and leaving it below 7 700 for the first time since October 10.
The blue-chip average fell 101,61 points, or 1,31%, to 7,673.99, now down 8% since the year began. The main catalyst was concern about what President Bush would say at last night’s news conference. Traders decided to hunker down and await the news.
The broad Standard & Poor’s 500-stock Index fell 0,93%, or 7.75 points, to 822,10, while the Nasdaq Composite Index retreated 0,88%, or 11,51 points, to 1,302.89, off 2,4% on the year. In Tokyo on Friday, the Nikkei 225 Stock Average fell 225,03 points, or 2,7%, to 8,144.12, its lowest close since March 1983, as hawkish comments on Iraq by US President George Bush and continued heavy selling by Japanese banks and corporations scared off investors. US chip giant Intel’s downward revision of its sales outlook overnight also weighed on sentiment. – I-Net-Bridge