Telecommunications group Telkom dominated activity on the JSE Securities Exchange (JSE) on Friday, which was otherwise quiet as players awaited the release of United States non-farm payrolls data at 2.30pm. While Telkom shares were down sharply, the rest of the market was firmer, helped by strength in US markets overnight and a slightly softer rand.
At noon, the all-share and all-share industrial indices were up 0,27% and 0,28% respectively. Resources inched up 0,13%, the gold-mining index bounced 0,54% and the platinum-mining index climbed 0,22%. Financials firmed 0,51%, while the banks index was flat (-0,04%).
The rand was quoted at R6,59 per dollar from R6,56 when the JSE closed on Thursday, while gold was quoted at $405,70 an ounce from $406,00/oz at the JSE’s last close.
“There is a lot of speculation in the Telkom scenario. It is the big story of the day and the stock has been knocked well down. Our analyst says the worst is still to come and is targeting R65 for the stock,” a dealer said.
He added that while deregulation of the telecoms market had been expected, everyone had thought it would be done overtime. The sudden announcement of radical changes had therefore left a sour taste in foreign investors’ mouths.
Telkom shares dived 5,38% or R4,17 in morning trade to R73,33.
Minister of Communications Ivy Matsepe-Casaburri on Thursday unveiled major liberalisations of the telecommunications sector.
From February next year, cellphone operators will be able to use any fixed lines that may be required for the provision of their service, including fixed lines provided by companies other than Telkom.
Value-added network service providers will also be allowed to carry voice over the internet, which will offer consumers a much cheaper way to make international calls than via Telkom.
“The rest of the market is pretty quiet. Everyone is waiting for the non-farm payrolls numbers. Consensus is for 150 000, but our forecast is for 100 000 and that it will surprise on the downside. If it is correct,
we should see strength in the rand and gold,” the dealer continued.
He said that on the whole, the JSE was up on the back of stronger US markets overnight and the rand, which had weakened a bit during the course of the morning.
“We are still seeing huge speculation in the banking sector. Standard Bank and FirstRand seem to have fallen by the wayside, but Absa is still seen as a prime candidate for an offshore takeover. There is also big demand for Sanlam because of its link to Absa,” the dealer concluded.
Absa shares advanced 1,3% or 75 cents to R57,30 and Nedcor jumped 1,3% or 75 cents to R58,50.
Shares in financial services group Sanlam, whose stake in Absa is about 20%, surged 3,51% or 33 cents to R9,72.
However, FirstRand fell four cents to R10,86, RMB Holdings retreated six cents to R16,59 and Standard Bank dipped 10 cents to R45,90.
On the resources market, AngloGold Ashanti advanced 1,26% or R2,92 to R234,02 and Gold Fields gained 59 cents to R78,99. Harmony, however, eased 40 cents to R80.
Anglo American was off 35 cents at R148,40 and BHP Billiton was 10 cents in the red at R62,10.
Oil and chemicals group Sasol strengthened 1,02% or R1,15 to R114,45.
Swiss-listed luxury goods group Richemont rallied 1,52% or 26 cents to R17,42 and pulp and paper producer Sappi rose 1,48% or R1,35 to R92,65.
Media group Naspers leaped 3,3% or R1,60 to R50,10 after earlier trading at R50,50 — its best since November 2000.
Naspers earlier said in a trading update that headline earnings attributable to ordinary shareholders for the six months ended on September 30 are expected to be more than 30% higher than those for the comparable period in 2003.
Retailer Edcon jumped 1,41% or R2,48 to R178 after earlier trading at a lifetime high of R179.
Foschini firmed 1,01% or 25 cents to R25,10 — its best since March 1996.
Woolies was up 1,23% or 10 cents at R8,20, Truworths rose 3,54% or 40 cents to R11,70 and Massmart jumped 1,39% or 50 cents to R36,50 — a lifetime high.
Truworths earlier traded at a best-to-date R11,75, while Woolies’ intraday high of R8,50 was its best since November 1997.
Pretoria Portland Cement picked up 1,66% or R2,90 to R177,90 after earlier trading at a lifetime high of R178.
Cellular network operator MTN Group gave up 25 cents to R30,20 and brand management group Barloworld weakened 40 cents to R74,50. — I-Net Bridge