The JSE Securities Exchange South Africa (JSE) was under pressure in noon trade on Thursday, with the stronger rand weighing on heavyweight dual-listed and resources stocks. The decline extended the bourse’s losing streak into its eighth day.
At 11.57am, the all-share index was down 0,96%. Resources retreated 1,39%, with the gold and platinum mining indices plunging 1,56% and 2,16% respectively. Financials fell 1,11%, banks tumbled 2,65% and industrials eased 0,28%.
The rand was trading at R6,86 per dollar from R6,94 when the JSE closed on Wednesday, while gold was at $400,25 an ounce from $399,15/oz at the JSE’s last close.
“The market is not a pretty picture. Everything is down due to the very strong rand,” a dealer lamented.
He continued that news out on Thursday morning was also affecting stocks.
London-listed diversified resources group Anglo American was off 1,4% or R2,20 at R154,80. It was about 0,5% weaker in the United Kingdom.
The dealer said the weakness resulted from the results of diamond giant De Beers.
“Most of the De Beers numbers were pretty good, but the contribution to Anglo’s earnings was well below consensus,” he explained.
De Beers on Thursday reported $5,518-billion in sales at its Diamond Trading Company for the year to December 2003, up 7% from $5,154-billion in the previous financial year. Headline earnings at $676-million were 17,6% higher than in 2002.
De Beers will contribute $386-million to Anglo’s headline earnings for the year ended December 31 2003.
The dealer added that Lonmin shares had also come under pressure on news that Bradford Mills, who is currently the president and chief executive of the Base Metals Division of BHP Billiton and a member of that company’s executive committee, will be appointed Lonmin’s chief executive.
Lonmin shares were 2,5% or R3,50 lower at R136,50. They were down by a similar amount in the UK. BHP Billiton was down 40 cents at R56,85 on the back of the currency.
“A lot of dividend players out of London had bought into Lonmin on the view that it would use the money it gets from Ashanti and pay a special dividend, but now there is talk that Lonmin is going to diversify outside out of platinum because the new CEO is a metals specialist and use the money for that instead. This has caused a flight out of the stocks,” the dealer explained.
Lonmin has a 27,6% stake in Ashanti, which is merging with AngloGold.
AngloGold and other gold producers were also down on the back of the rand and a poor performance by their ADRs in the United States overnight.
AngloGold was two rand weaker at R283,50, Gold Fields dropped 1,93% or R1,70 to R86,40 and Harmony was off 1,27% or R1,39 at R108.
Platinum stocks were also under pressure, with Impala losing 2,48% or R14 to R551 and AngloPlat easing 1,74% or R5,50 to R311,50.
Northam nosedived 5,74% or 70 cents to R11,50 after reporting a 50% decline in headline earnings per share to 44,9 cents for the six months to December 31 2003, from 89,9 cents in the comparative period in the prior year.
The company declared an interim dividend of 45 cents per share, down 50% from 90 cents previously.
Synthetic fuels group Sasol slipped 1,66% or 79 cents to R100,80.
Industrials to decline included Swiss-listed luxury goods group Richemont, which dipped seven cents to R17,24.
Telecommunications group Telkom was down 1,1% or 85 cents to R76,75 and cellular network operator MTN group gave up 30 cents to R30.
AVI weakened 2,43% or 45 cents to R18,10.
On the financial front, banks were taking strain with FirstRand falling 2,16% or 20 cents to R9,05. Standard Bank slumped 3,86% or R1,60 to R39,90, Absa was 1,56% or 70 cents softer at R44,15 and Nedcor fell 1,83% or R1,29 to R69,01.
Investec Plc, however, bounced 90 cents to R130 and Investec Ltd ticked up one rand to R129.
Furniture retailer Steinhoff strengthened 1,18% or 10 cents to R8,60 and Nu Clicks climbed 1,99% or 15 cents to R7,70.
Brand management group Barloworld was 60 cents better at R68,40. — I-Net Bridge