Sharp falls in gold counters pared gains on the JSE Securities Exchange South Africa by noon on Wednesday, with the bourse in flattish territory. The weakness in the rand, however, gave impetus to dual-listed stocks.
Just before midday the all share index was 0,25% firmer, the all share industrial index gained 0,98%, the financial index added 0,95%, the platinum index picked up 0,76% and the banks index soared 1,44%. However, the gold index surrendered 5,14% and the resources index lost 0,68%.
The rand was trading at 7,7550 to the US dollar from a previous close of 7,7050 while gold was quoted at $342,70 an ounce, virtually unchanged from its close on Tuesday.
“The broader market is being held up by the softness in the currency, which is offering some support to dual-listed counters. Gold stocks, however, are being hit by the weakness in the bullion price and the sell-off in their US counterparts overnight,” a dealer commented.
The South African rand was weaker against major currencies in late morning trade on Wednesday after the greenback’s rise against the euro sparked further dollar buying locally. Currency traders said that the rand was in a weakening trend and saw the currency targeting R8 per dollar in days or weeks to come.
The equities dealer added that the overall market was relatively quiet, with the main focus on gold shares.
Harmony was the hardest hit, with the share plunging 7,82% or R7,25 to R85,50. The dealer said additional pressure was being placed on the share by the announcement on Tuesday that it had bought an extra 11,5% stake in Avgold from commodity giant Anglo American.
Tuesday’s acquisition follows the announcement in May that Harmony and African Rainbow Minerals Gold had jointly acquired a 34,5% stake in Anglovaal Mining, which also holds a 42,5% stake in Avgold.
Gold Fields fell 5,24% or R4,70 to R85 and AngloGold dipped 3,23% or R8 to R240.
Dual-listed counters to take advantage of the softer rand included Anglo American, which firmed 53 cents to R125,80, Richemont, which added 1,84% or 25 cents to R13,85, and SABMiller, which picked up 48 cents to R51,35.
Meanwhile, shares in Liberty International plc, the UK’s third largest listed property group which has a dual listing in South Africa, rose 1,43% or R1,11 to R78,50 after the group earlier reported a strong performance for the six months to the end of June, boosting earnings per share before exceptional items by 29%.
Earnings per share before exceptional items amounted to 14 pence compared with 10,82 pence for the previous comparable half-year. Basic earnings per share including exceptional profits increased from 12,96 pence to 15,1 pence.
Standard Bank dominated the upside, with the share gaining 2,83% or 95 cents to R34,55, while FirstRand notched up 1,25% or 10 cents to R8,10 and Old Mutual was 1,11% or 13 cents stronger at R11,85.
Other advancers included Sappi, which was 1,60% or R1,55 higher at R98,50, AngloPlat was R2,20 to the good at R245,30 and Bidvest was 1,86% or 82 cents up at R45. – I-Net Bridge