The JSE Securities Exchange South Africa (JSE) was almost 1% in the red at midday on Monday, despite a weaker rand.
Dealers said the market was experiencing some weakness with the gold price retreating below the $400 an ounce level, and that it was a pity that the market had not been able to capitalise on the slightly weaker currency.
At 11.52am, the all-share index was down 0,98%. Resources and gold mining counters led the downside, off 1,75% and 1,43% respectively, while financials were down 0,66% and banks shed 0,64%. Platinum mining counters were down 0,96% and industrials were off 0,18%.
The rand was quoted at R6,7550 per dollar from R6,7150 at the New York close, while gold was quoted at $399,45 an ounce from $397,63/oz at the previous close.
Dealers said that there had been some activity earlier in the morning, with several sets of corporate results, but that the market had since turned quiet.
Resources heavyweight Anglo was down 1,36% or R2,25 to R162,75, while BHP Billiton was 3,13% or R2 weaker at R61,90.
However, the main feature of the morning was banking group Nedcor, which was off 4,51% or R3,02 at R63,98 following the announcement of year-end results and a R5-billion rights offer. However, it was off its lows of R63,10.
Although the results had been expected to be sharply lower, the announcement that Nedcor would raise R5-billion via a rights offer had unsettled the market.
“We had expected the high write downs and there were no real surprises in the results, but there is uncertainty about the pricing of the rights issue,” said an equities trader.
Describing the past financial year as “extremely challenging”, Nedcor reported a R1,6-billion loss for the 12 months ended December. Headline earnings shrank from R2,5-billion the previous year to just R55-million.
Headline earnings per share plummeted from 1 364 cents to 542 cents.
The group’s results were hard hit by the stronger rand, which resulted in unrealised translation losses of R1,4-billion compared to R1,2-billion in 2002. The group has held excessive capital in foreign currencies and to reduce this exposure, R1-billion of offshore capital was converted to rand-denominated capital in November and December 2003, the group said.
Nedcor also announced it is to raise R5-billion rand by way of a rights offer to ensure that it has sufficient capital for growth and to meet its anticipated minimum tier-one capital requirements.
The full terms of the rights issue, including the number of shares to be issued and the issue price, are expected to be announced by March 25 2004, prior to the launch. The rights offer is to be partially underwritten by Old Mutual plc, which owns 52% of Nedcor.
Old Mutual, which also announced its results on Monday, was last quoted at R11,60, down 2,11% or 25 cents from Friday’s close.
Old Mutual reported a 13% decline in adjusted operating earnings per share (EPS) in sterling terms for the year to the end of December 2003, dented mainly by a poor performance from Nedcor and the weaker dollar exchange rate in both rand and sterling terms. In rand terms, adjusted operating EPS fell 31%.
The group declared a final dividend of 3,1 pence per share, unchanged from a year earlier, bringing the total dividend for the year to 4,8 pence.
Old Mutual said its final adjusted operating EPS fell to 10 pence from 11,3 pence a year earlier, while in rand terms the equivalent figures were 123,8 cents versus 179 cents in 2002.
Also in the news, IT company Comparex was up 6,07% or 65 cents to R11,35 following its results earlier in the morning. It reported headline earnings per share of 44,2 cents for the six months ended November 30 from 47 cents a year ago. A dividend of R5,50 per share in anticipation of the members voluntary winding up has been declared.
Revenue rose to R1,432-billion from R1,398-billion before, while attributable profit rose to R117,1-million from R103,7-million before.
Comparex said that the general sentiment in the information communication and technology sector is positive and a turnaround is on the horizon.
Bidvest, which also reported interim results first thing, was up 1,35% or 69 cents to R51,70. It reported a 2% increase in headline earnings per share to 248 cents for the six months ended December 31 from 243,2 cents a year ago.
The distribution per share was increased by 5% to 113,4 cents per share from 108 cents previously.
Among gold shares, AngloGold was down R1,49 or 0,54% to R273,50, while Harmony was off 1,12% or R1,20 to R105,70.
Among platinum counters, AngloPlat was off 1,37% or R4 to R288, while Impala was down 0,91% or R5 to R545. — I-Net Bridge