The JSE Securities Exchange South Africa (JSE) was drifting in the red just before noon on Friday in a dull, featureless market. Strong performances by some of the dual-listed stocks offshore and foreign interest in gold stocks pared the
bourse’s losses, but overall there were no incentives to draw buyers into the market, dealers said.
At 11.52am, the all-share index was 0,23% softer. Financials were 0,57% weaker, while the banks index was down 0,56%. Resources retreated 1,15% and the platinum mining index plunged 1,15%, but the gold mining index gained 0,5%. The all-share industrial index was flat.
The rand was trading at R7,38 to the dollar from R7,41 when the JSE closed on Thursday, while gold was quoted at $378,75 an ounce from about $375/oz at the JSE’s last close.
“The market seems to have run out of ideas,” a dealer lamented.
He explained that after hitting long-term highs early in the week, the gold and platinum prices had not done much. The rand also remained strong despite Wednesday’s 100 basis point cut in the repo rate by the South African Reserve Bank’s monetary policy committee (MPC).
“I think the market has got post-interest rate cut blues. The expectations preceding the MPC meeting were not fulfilled. When the meeting was first called, people didn’t understand why. They thought the MPC was going to do something to weaken the rand and this didn’t happen,” he continued.
While the rand weakened sharply last Friday when it was announced that a special MPC meeting would be convened, it recouped some of its losses on Tuesday afternoon on exporter dollar sales and then firmed sharply late on Wednesday after the cut, with offshore players unwinding long dollar positions.
The dealer asserted that with banks and retailers failing to respond to Wednesday’s rate cut, local economy stocks had little to offer investors.
Therefore the only place to look for “fun and action” was gold and platinum stocks as well as other rand hedges and these provided “nothing to get excited about”.
Shares to decline in morning trade included synthetic fuels group Sasol, which slumped 2,97% or R2,70 to R88,30.
Impala Platinum was 1,74% or R10,00 weaker at R565,00 and AngloPlat lost 1,82% or R5,00 to R270,00.
London-listed beverages group SABMiller slipped 40 cents to R54,60 and pulp and paper producer Sappi shed 64 cents to R100,10.
On the financial front, London-listed Old Mutual was 1,42% or 17 cents in the red at R11,83.
Standard Bank was down 31 cents at R31,60, Nedcor fell 1,41% or R1,10 to R76,80 — its lowest level since October 1998 — and Absa was off 1,01% or 35 cents at R34,35.
Advancers included London-listed diversified resources group Anglo American, which was up 50 cents at R138,00. BHP Billiton was 20 cents better at R50,55.
AngloGold added R2,10 to R290,00, Gold Fields gained 61 cents to R105,50 and Harmony was 79 cents higher at R11,99.
“There is still foreign interest in gold stocks. They don’t want to be in the dollar and there is a belief that gold has still got legs as well as a view that the rand will show a bit of weakness,” the dealer explained.
On the all-share industrial index, Swiss-listed luxury goods group Richemont was up 12 cents at R15,40 and AVI soared 2,37% or 40 cents to R17,30 — a new high.
AECI surged 4,48% or R1,20 to R28,00.
Niche banking group Investec Plc was one of the top performers on the financial front, firming 1,01% or R1,08 to R108,23. — I-Net Bridge