Resources dominated activity on the JSE Securities Exchange (JSE) in noon trade on Thursday, though the market was flat overall with the positive impact of a weaker rand being offset by lower precious metals prices. Volumes were extremely light with just more than R600-million-worth of shares changing hands.
By 11.58am, the all-share, financial and resources indices were all flat, while the gold and platinum mining indices lost 0,42% and 1,19% respectively. The banks index weakened 0,29%, but the all-share industrial index climbed 0,18%.
The rand was quoted at R6,66 per dollar from R6,61 when the JSE closed on Wednesday, while gold was quoted at $383,88 an ounce from $386,05/oz at the JSE’s last close. Platinum was quoted at $804,50/oz from $811/oz when the bourse closed previously.
A dealer said that the market was very confusing and hard to put into a box.
“There is a lot of negativity coming into resources. Institutions are going long dollars on the back of United States rate permutations and the gold price is coming down. The rand is also quite a bit weaker on the back of the dollar’s strength, which is propping up the market a bit, but there is not much else driving it,” he commented.
The US Federal Open Market Committee is expected to increase rates by 25 basis points to 1,25% after its meeting on June 29 and 30.
“If the dollar buying continues, resources will definitely not be the flavour of the month. Precious metals will remain under pressure and guys will be selling resources and getting into US-related stocks,” he added.
Although it was down in London, the softer rand helped Anglo American inch up 15 cents locally to R136,75. BHP Billiton was 49 cents better at R55,30, but oil and chemicals group Sasol slipped one rand to R101.
Gold miner Harmony lost 1,14% or 79 cents to R68,50 and Gold Fields eased 15 cents to R69.
On the industrial market, Swiss-listed luxury goods group Richemont was down a marginal two cents at R17,65.
Before the opening, Richemont reported that fully diluted earnings per unit for the year to the end of March 2004 rose by 3% to â,¬1,193 despite a 8% decline in sales to â,¬3,375-billion.
An 11% drop in operating expenses meant that operating profit rose by 14% to â,¬296-million, which allowed Richemont to increase its dividend by 25% to â,¬0,4 per unit.
Looking ahead, Richemont said that although coming off a low base last year, as a consequence of the severe acute respiratory syndrome crisis and the war in Iraq, its results in the first half of this year would inevitably benefit from the improved performance that Richemont is currently seeing.
Nevertheless, it preferred “to take a cautious stance as to the outlook for the remainder of the financial year”.
“Richemont’s results were positive, but that was pretty much in the price already. However, its expectations were not too solid,” the dealer asserted.
Cellular network operator MTN Group gave up 30 cents to R32,20 and furniture group Steinhoff tumbled 2,33% or 20 cents to
R8,40.
London-listed beverages group SABMiller, however, strengthened 1,75% or R1,40 to R81,50 and pulp and paper producer Sappi picked up 80 cents to R92,65.
On the financial front, real estate company Liberty International plc leaped 1,1% or 99 cents to R91.
Banking group Nedcor was 21 cents in the black at R65.
FirstRand, however, fell six cents to R10,14, Standard Bank dipped 10 cents to R42,80 and Absa was off 10 cents at R50,30. — I-Net Bridge