After touching a fresh all time high during Monday morning’s session, the JSE Securities Exchange South Africa remained strong, but off its highs by midday. Dealers said most of the major indices were strong, with the exception of gold and resources, which were both in the red. Several companies’ share prices reached all time or long term highs.
By midday, the all share index was up 0,19%, industrials advanced 0,55%, financials were 0,34% higher and banks garnered 0,57%. However, resources were down 0,21% and gold miners were 0,75% softer. The platinum index was up 0,77%.
The rand was at 6,4650 per US dollar from 6,49 when the JSE closed on Friday. Gold was quoted at $416,63 a troy ounce from $416,80/oz when the JSE closed on Friday.
The all share index touched a best ever level of 11968,74 at its strongest point on Monday morning, but has come off that high, although it is still stronger than Friday’s close.
Dealers attributed the firmness in the market to bullish sentiment on world markets, hopes of an interest rate cut when the Reserve Bank meets next week and the strong banking sector on the back of the Barclays bid for Absa.
After a strong run at the end of last week, global markets remained firm at the start of the week, with London’s FTSE up 0,62% and the Paris CAC 40 up 0,96%.
Other European stock markets were also strong, as were markets in the Far East, where the Hang Seng Index closed up 239,22 points, or 1,82% and the Tokyo Nikkei 225 Stock Average closed up 294,46 points or 2,7% — its highest close since September 14, AFX reports.
Local traders added that strong new vehicle sales were also aiding the local trend. Figures released by the National Association of Automobile Manufacturers of South Africa (Naamsa) on Monday showed new vehicle sales in September 2004 increased by 22,7% year-on-year (y/y), or 7 971 units, to 43 145 units after rising in August 2004 by 18,8% y/y and in July 2004 by 15% y/y. Naamsa said it had been the best overall September sales month on record.
The year to date aggregate new vehicle sales were 19,3% ahead of the same period a year ago.
”It’s only golds that seem to be taking a back seat for now and the only reason I can think of is that there may be a cyclical shift out of our golds to higher earnings yield shares such as US and Canadian golds,” said an equities trader.
Among resources stocks, Anglo was down 29 cents, or 0,19%, at R155,70, while BHP Billiton was 25 cents softer at R69,20.
Among gold miners, AngloGold Ashanti was down 440 cents, or 1,78% to R243,10, while Gold Fields was 0,40%, or 35 cents softer at R86,65. However, Durban Deep was up 5,34%, or 70 cents, to R13,80.
Among industrials, SABMiller was 1,08%, or 93 cents firmer at R87,15, while Sasol was 10 cents down at R122,70. Sappi advanced 55 cents to R94,80 while Barloworld was up 180 cents, or 2,25%, at R81,80.
In the banking sector, Absa was quoted 10 cents lower at R64,40, but Standard Bank was 75 cents higher at R51,75 and Nedcor was last up 70 cents at R60,50.
UK banking group Barclays is currently looking to take a controlling stake in Absa. The market on Monday took heart from reports that South African President Thabo Mbeki backs Barclays’ approach. – I-Net Bridge