The JSE Securities Exchange South Africa (JSE) was flat in noon trade on Wednesday, with no fresh news to draw buyers into the market. Gold was the only sector to really shine on a lacklustre bourse.
At 12.13pm, the all-share index was flat (+0,08%), as was the financial index (-0,09%). The all-share industrial index dipped 0,16%.
The platinum mining index fell 0,65% and the banks index eased 0,43%. Resources were 0,34% firmer, boosted by the gold mining index, which jumped 1,80%.
The rand was trading at R7,37 to the dollar, little changed from when the JSE closed on Tuesday, while gold was quoted at $364,90 an ounce, up more than $3 from the JSE’s last close.
“We started strong, but the rally seems to have petered out and we are going sideways,” a dealer said.
He continued that there were no new incentives to draw people into the market.
“What has killed us is that against the background of yesterday’s poor GDP and CPIX numbers, people expected the rand to weaken, but it hasn’t. That took the wind out of speculators’ sails.”
The rand was trading at about R7,48 at lunchtime on Tuesday.
The dealer continued that the worse-than-expected CPIX figure raised concerns that future interest rate cuts would be delayed, negatively affecting industrial and financial stocks at the same time that the rand’s strength was hurting resources.
“The only thing to get buyers into the market is the gold price,” the dealer asserted.
Gold Fields gained 1,99% or R1,89 to R96,79, Harmony soared 3,02% or R2,99 to R102,00 and AngloGold added 1,46% or R3,88 to R270,50.
Other strong performers on the resources index included synthetic fuels group Sasol, which was up 75 cents at R82,25, and AngloPlat, which added 75 cents to R267,00.
On the all-share industrial index, cellular network operator MTN group climbed 13 cents to R17,99 and hospital group Netcare was up three cents at R4,08.
London-listed IT group Dimension Data surged 1,05% or three cents to R2,88.
Remgro led advancers on the financial front and gained 50 cents to trade at R62,70. Liberty International Plc was up 50 cents at R77,50.
On the JSE’s downside, Impala Platinum slumped 1,28% or R7,00 to R541,00 rand. London-listed diversified resources group Anglo American dipped 50 cents to R135,00.
Pulp and paper producer Sappi shed 95 cents to R93,75 and brand management group Barloworld was off 1,18% or 70 cents at R58,55.
Transport and logistics group Imperial was 45 cents weaker at R58,55. Before the opening the company reported an 15% increase in headline earnings per share to 700,2 cents for the year to June 25 2003 from 608,8 cents last year. The I-Net consensus forecast for HEPS was 706 cents.
Financials to fall included Standard Bank, which slipped 30 cents to R32,70.
African Life tumbled 6,25% or one rand to R15,00.
Sage slumped 4,55% or 10 cents to R2,10. The life assurance group earlier reported headline earnings per share of 28,5 cents for the six months ended June, which was just slightly lower than the 31,9 cents per share recorded for the previous nine months.
The dealer noted that Sage had been run up ahead of the results. The share is up more than 14% for the month, despite Wednesday’s losses,
Data released on Tuesday showed South Africa’s CPIX inflation (headline inflation excluding mortgage costs), the measure used by the Reserve Bank for inflation targeting purposes, was up 6,6% year-on-year (y/y) for metro and other areas in July 2003 compared with 6,4% in June. CPIX was up 1,1 month-on-month (m/m) compared with a 0,3% decline m/m in June.
CPIX was expected to ease to a median of 6,2% y/y from June’s 6,4% y/y, The range of forecasts was from 5,6% y/y to 6,4% y/y.
Favourable interest rate differentials and the related carry trade are widely regarded as a reason for the rand’s strength in recent months.
South Africa’s real gross GDP at market prices on a quarter-on- quarter (q/q) seasonally annualised and adjusted (saa) basis rose by 1,1% in the second quarter of 2003 compared with 1,5% in the first quarter of 2003.
On a year-on-year basis Q2 2003 GDP was up 1,8% from Q1’s 2003 GDP rise of 2,5% y/y. According to a survey of economists South Africa’s second quarter 2003 GDP growth was expected to have remained steady.
South African producer prices for all commodities rose 1,5% in the 12 months to end July from a 2,3% increase for the 12 months to end July, Statistics South Africa said on Wednesday. On the month, they were up 0.4% in July on an actual unadjusted basis from a rise of 1,4% in June.
South Africa’s July producer price index (PPI) was expected to increase by a median of only 1,4% y/y, according to an I-Net Bridge survey of private sector economists. The range of forecasts was from -0,8% y/y to 1,8% y/y. — I-Net Bridge