The JSE Securities Exchange (JSE) was weaker in noon trade on Tuesday, led lower by resources and telecommunications stocks, which were knocked by analysts’ downgrades. Trade was brisk, with about R1,5-billion-worth of shares changing hands.
By 12.03pm, the all-share index slipped 0,65%. Resources retreated 0,89%, with the gold-mining index tumbling 2,5% and the platinum-mining index losing 0,65%. Industrials weakened 0,75%, financials fell 0,2%, but the banks index inched 0,08% higher.
The rand was quoted at R5,74 per dollar from R5,73 when the JSE closed on Monday, while gold was quoted at $453,30 an ounce from $454/oz at the JSE’s last close.
A dealer said that it had been a very busy morning’s trade.
“I thought the market would go a bit better, but then foreign reserves figures came out, which were disadvantageous,” a dealer said. “Merrill Lynch has cut resources forecasts on an improved rand outlook.”
The dealer added that MTN Group and VenFin had also been under pressure on the back of ratings downgrades by Investec.
While the overall trend on the market was negative, petrochemicals group Sasol was stronger on the back of the oil price, which stabilised after sliding last week.
Retailer Metoz was also a feature. The share continued to benefit from Monday’s offer from Metcash Australia to buy out Metoz’s 60,3% stake in the group for R2,65 per share.
The dealer said that there were also rumours in the market that Metoz shareholders would receive a special dividend.
Metoz shares soared 5,24% or 13 cents to R2,61 on Tuesday after rocketing 27% on Monday.
Sasol strengthened 1,75% or 190 cents to R110,40.
Services group Bidvest was up 50 cents at R76,50 and chemicals and explosives group AECI leaped 2,86% or one rand to R36.
Standard Bank climbed 50 cents to R59,30, while Nedcor jumped 1,59% or R1,20 to R76,70.
Financial services group Sanlam surged 1,67% or 20 cents to R12,20.
On the downside, London-listed resources group Anglo American lost 1,2% or R1,60 to R131,40. BHP Billiton surrendered 52 cents to R64,50.
Merrill Lynch cut its ratings on Anglo and Billiton to “neutral” from “buy”, the dealer said. It adjusted its rand forecast from R7,75 per dollar at the end of 2005 to R6,40 per dollar.
Gold Fields plunged 3,4% or R2,64 to R75,01, and Harmony dived 3,88% or R2,35 to R58,15.
AngloPlat surrendered 1,25% or R2,54 to R201,40.
Cellular network operator MTN Group slumped 3,19% or R1,30 to R39,50 after Investec cut its holding on the stock to “hold” from “buy”, even though the target price on the stock was raised to R47.
Telkom weakened 1,77% or R1,70 to R94,50, even though Investec retained its “buy” recommendation.
Holding company VenFin, which has a 15% stake in Vodacom, slid 2,7% or 70 cents to R25,20. Investec reduced its recommendation on VenFin to “sell” from “buy” even though it upped its target price to R28,50 from R25.
Steel producer Ispat Iscor was 2,7% or R1,74 softer at R62,76.
Retailer Massmart slumped 3,13% or 150 cents to R46,50 after it said that it was expecting to report higher sales and headline earnings per share for the year to the end of June 2005, but at a slower growth rate than that experienced in 2004.
Edcon retreated 2,53% or R6,94 to R267.
Niche banking group Investec plc was 2,46% or R4,19 in the red at R165,81.
Old Mutual was down 1,08% or 16 cents at R14,69, while commercial bank FirstRand fell 1,13% or 15 cents to R13,10.
Currency traders noted on Tuesday that the rand remained strong despite the fact that data released by the South African Reserve Bank showed that it had increased its buying of dollars to add to its foreign reserves to $1,307-billion in November, from $962-million (made up of an increase of $590-million in foreign reserves and the repayment of a €300-million loan worth $372-million) in October and only $310-million in September and $164-million in August.
They said the local unit’s strengthening trend remained intact, but that the market was likely to remain cautious ahead of the Reserve Bank monetary policy committee’s decision on interest rates due on Thursday afternoon. — I-Net Bridge