/ 17 April 2003

JSE flat, but better than expected

The JSE Securities Exchange South Africa (JSE) was essentially flat in early trade on Thursday, despite indications that it would open significantly down on the US market’s drop overnight and the stronger rand. Dealers said volumes were extremely light and few shares had actually traded.

At 0918, the all share and all share industrial indices were down 0,29% and 0,07% respectively. Financials were also 0,29% weaker, while the resources shed 0,42%. The mining indices were mixed, but essentially flat, with gold down 0,26% and the platinum mining index up 0,23%. This was despite a higher gold price. The banks index was flat (-0.04%).

The rand was trading at 7,6250 to the dollar from 7,6970 when the JSE closed on Wednesday, while gold was quoted at $326 an ounce from $324,95 when the JSE closed.

The South African rand reached a new best level for 2003 in early morning trade on Thursday as it broke below 7,60 rand per dollar to touch 7,5868 rand per dollar. This was its best level since January 2001.

The fresh gains came as the US dollar weakened against other major currencies overnight on geopolitical tensions and jitters about the US economy.

“It has been another very slow start and players are still hesitant on the JSE,” a dealer said.

She added that the rand’s strength was hitting the dual-listed stocks again and resources were going to come under pressure. Despite a higher gold price, gold stocks were down and she added that even if these stocks picked up their effect was likely to be negated by the stronger currency. A lot of players were taking the view that the rand would strengthen further, which was adding to jitters in an already nervous market.

“Added to all this, the upcoming holiday and today itself being a Jewish holiday will ensure trade volumes remain low,” she said.

Shares to decline in early trade included London-listed diversified resources group BHP Billiton (BIL) which was down 1,22% or 50 cents at R40,50, while Sappi (SAP) lost 1,11% or R1 to R89.

Shares in South African international industrial brand management company

Barloworld (BAW) were down just under 1% or 75 cents at R79,95 after the company released a trading update earlier on Thursday, saying that its headline earnings per share would show a reduction for the half year compared to the first half of last year.

Gold miner Gold Fields (GFI), the only gold stocks to have traded yet, was 50 cents weaker at R81, although Impala Platinum (IMP) were up R2 at R407.

On the financial index, Standard Bank (SBK) lost 25 cents at R28,25, while South Africa’s largest retail banker ABSA (ASA) gained 1,27% or 40 cents to R31,80.

Old Mutual (OML) dropped 1,83% or 20 cents at R10,70.

Dow Jones Newswires reports that with Microsoft, Intel and its other two tech members as the only gainers, the Dow Jones Industrial Average crumbled while the Nasdaq Composite Index managed a slight advance as investors looked beyond first-quarter numbers and found cloudy outlooks.

The Dow Jones Industrial Average fell 144,75, or 1,7%, to 8,257.61. The Standard & Poor’s 500 Index also tumbled, by 10,90, or 1,2%, to 879,91. But the Nasdaq Composite Index added 3,71, or 0,3%, to 1,394.72. – I-Net-Bridge