The JSE Securities Exchange South Africa (JSE) was bleeding in noon trade on Tuesday on the back of weaker world markets overnight and a stronger rand.
By 11.56am, the all-share and all-share industrial indices were down 1,18% and 1,47% respectively. Resources retreated 1,6% in morning trade, the gold mining index surrendered 1,04% and the platinum mining index slumped 1,27%. The financial (+0,01%) and banks (-0,04%) indices were flat.
The rand was quoted at R6,53 per dollar from R6,62 when the JSE closed on Friday, while gold was quoted at $417,13 an ounce from $412,10/oz at the JSE’s last close. South African markets were closed on Monday for a public holiday.
“The JSE is looking very weak — it is tracking world markets and the firmer rand,” a dealer said, adding that these two factors were responsible for 90% of the JSE’s weakness.
“Also, with the futures closeout last Thursday, the market was pushed up dramatically and it is reversing some of its gains,” he added.
The JSE was closed for Human Rights Day on Monday, when world markets tumbled after Israel assassinated Hamas spiritual leader Sheikh Ahmed Yassin and was playing catch-up on Tuesday.
While commodity prices were high, the strong rand was keeping commodity stocks in check.
London-listed diversified resources group Anglo American lost 1,89% or three rand to R155,40, while BHP Billiton slumped 2,07% or R1,25 to R59.
AngloGold gave up 1,95% or R5,40 to R272 and Gold Fields fell 1,03% or 84 cents to R81,06.
Impala Platinum was down 1,87% or R9,99 at R525.
On the industrial market, Swiss-listed luxury goods group Richemont plummeted 54,99% or 85 cents to R16,20.
London-listed IT group Dimension Data dived 6,21% or 27 cents to R4,08.
While London-listed beverages group SABMiller slipped 1,28% or 95 cents to R66,50, ABI advanced 2,17% or R1,50 to R70,50. SABMiller is ABI’s parent company.
Earlier on Tuesday, ABI announced that it expected its headline earnings for the year to the end of March, to be between 10% and 30% higher than those of the previous year. The main reasons for the improvement were volume growth, particularly over the peak festive period, continued overhead productivity gains and management of input costs.
Meanwhile, SABMiller said that its struggling United States subsidiary, Miller Brewing Company, had recorded a decline of 2,7% in its sales to retailers on a pro-forma basis for the 11 months to the end of February 2004, an improvement on the 3,4% recorded for the nine months to December 2003.
SABMiller said the Miller financial performance was ahead of expectations, reflecting better Miller Lite volumes, efficiencies and improved effectiveness in marketing spend, and benefits from restructuring. Overall, the execution of the Miller turnaround strategy remained on schedule.
Overall, SABMiller reported organic lager volume growth of just more than 3% for the period, while its operating performance remained strong.
Cellular network operator MTN Group, the morning’s most active stock, dipped 10 cents to R32,40, while Telkom weakened 30 cents to R72,90.
Before the opening, Telkom said that it expects its earnings and headline earnings for the financial year ending March to be substantially above earnings and headline earnings for the prior year. In terms of the JSE listings requirements, substantially is defined as a change of more than 30%.
On the financial front, banking group FirstRand fell five cents to R9,45 and Nedcor eased 50 cents to R60. Niche banking group Investec plc was down R1,20 at R136.
Standard Bank, however, strengthened 15 cents to R40,95 and microlender ABIL advanced nine cents to R10,30. — I-Net Bridge