The JSE Securities Exchange South Africa (JSE) was slightly stronger in noon trade on Wednesday, with heavyweight resources stocks benefiting from higher precious metals prices. However, volumes were fairly light and the market lacked overall direction, dealers said.
At 12.14pm, the all-share index was up 0,29%. Resources rallied 0,74% in morning trade, with the gold and platinum mining indices gaining 1,08% and 1,65% respectively. The all-share industrial index was a marginal 0,11% firmer. Financials were down 0,28%, with the banks index surrendering 0,81%.
The rand was quoted at R6,59 per dollar, little changed from when the JSE closed on Tuesday, while gold was quoted at $403,75 an ounce from $402,40/oz at the JSE’s last close.
“It has been a very slow day — volumes have not been good,” a dealer said.
He added that worse-than-expected inflation numbers released at 11.30am had been expected to be positive for the rand. However, their impact on the local unit had been minimal so there had been no knock on the JSE.
“Overall, the market has got no direction. Gold and platinum stocks are better on the back of higher precious metal prices. Anglo’s results were released before the opening, but they weren’t very exciting.”
London-listed Anglo American, the JSE’s heaviest weight stock, was up R1,20 at R162,39.
The diversified resources group reported headline earnings per share of 120 United States cents for the year ended December 31 2003, down from 125 US cents previously.
The group reported a dividend per share of 54 US cents, up from 51 US cents before and up on the market expectation of 52 US cents.
Anglo’s headline earnings declined to $1,694-billion from $1,759-billion previously.
BHP Billiton was 45 cents better at R60,45.
On the gold mining index, Gold Fields firmed 2,11% or R1,70 to R82,20 and AngloGold gained 1,47% or four rand to R277.
Harmony, however, fell 54 cents to R102,85.
Impala Platinum picked up 1,51% or eight rand to R538 and AngloPlat advanced 1,4% or four rand to R282.
On the industrial market, Swiss-listed luxury goods group Richemont climbed nine cents to R17.
London-listed beverages group SABMiller jumped 1,47% or R1,01 to R69,91 and cellular network operator MTN group ticked up 20 cents to R29.
Telkom, however, tumbled 2,13% or R1,45 to R66,50.
It was announced on Tuesday that South Africa’s Competition Commission has found Telkom’s conduct against value-added network service providers to be anti-competitive and has referred the matter to the Competition Tribunal for determination.
This could see the group fined up to 10% of its annual revenue, which means the group could have to forfeit R3,7-billion based on its results for the year to March 2003.
On the financial front, short-term insurer Santam was 1,52% or 75 cents stronger at R50,25. Before the opening, it reported a 174% surge in headline earnings per share (HEPS) for the year ending December 31 2003 to 751 cents from 274 cents a year earlier. The group declared a final dividend of 148 cents per share, bringing the total dividend for the year to 220 cents per share, a 29% increase from 2002.
The results far outpaced the I-Net Bridge earnings consensus of five analysts, which pointed to HEPS of 586 cents and a dividend of 188 cents per share.
London-listed Old Mutual was six cent sin the black at R11,51 and Sanlam inched up two cents to R9,02.
Banks were under pressure, however, with Nedcor plunging 3,25% or two rand to R59,50.
“The market is still digesting the bad news from Monday — both the poor results and the rights offer. The share is likely to remain under pressure until the market knows the price at which the rights offer is to be set at — we already know how much they are looking to raise,” the dealer commented.
Another dealer said that given Nedcor’s performance of late, R5-billion was a lot to ask shareholders to shell out. The rights offer would therefore need to be at an attractive price.
Nedcor on Monday reported a R1,6-billion loss for the 12 months ended December. Headline earnings shrunk from R2,5-billion the
previous year to just R55-million rand.
Headline earnings per share plummeted from 1 364 cents to 542 cents, which was worse than an I-Net Bridge consensus forecast of 646,5 cents per share.
Nedcor also announced that it would raise R5-billion via a rights offer and dealers expect the share to remain under pressure until this is resolved.
Absa was 1,3% or 60 cents in the red at R45,40, FirstRand fell three cents to R9,15 and Standard Bank dipped 30 cents to R39,80.
South Africa’s CPIX inflation (headline inflation excluding mortgage costs) was up 4,2% year-on-year (y/y) for metro and other areas in January compared with 4% in December, Statistics South Africa (Stats SA) said on Wednesday. CPIX was up 1,1% month-on-month (m/m) compared with a 0,1% m/m increase in December.
Headline consumer prices — the 12-month rate of change in the consumer price index (CPI) for metropolitan areas — was up 0,2% y/y from a 0,3% y/y increase in December.
CPIX, which is used by the South African Reserve Bank for its inflation target, was expected to ease to a record low 3,9% y/y. — I-Net Bridge