The JSE Securities Exchange (JSE) was in the red at midday on Tuesday on the back of weaker world markets and a rotation out of banking and cyclical industrial stocks. Resources posted gains, however, helped by a weaker rand.
At 12.05pm, the all-share and all-share industrial indices were 0,39% and 0,85% weaker respectively. Financials fell 1,07% and the banks index slumped 1,76%. The platinum-mining index dipped 0,11%. Resources rose 0,67% and the gold-mining index gained 0,43%.
The rand was quoted at R6,08 per dollar from R6,02 when the JSE closed on Monday, while gold was quoted at $422 a troy ounce, little changed from its level at the JSE’s last close.
“There has been quite a big demand for resources stocks,” a dealer said.
He added that the weaker rand was helping resources stocks. All the major institutions had also upgraded BHP Billiton recently.
“The trend in this market has been to get out of banks and cyclical industrials, such as retailers, and into resources. People realise that these stocks might have reached their peaks and are cycling into resource-based stocks,” the dealer commented.
He said that weakness in financials and industrials had been exacerbated by negativity on global markets.
Cold weather in the United States sent crude prices higher and US equity futures fell on the back of this. European markets were also weaker, he explained.
On the resources index, diversified resources group Anglo American advanced 1,58% or R2,20 to R141,80 and petrochemicals group Sasol strengthened R1,20 to R124,70. BHP Billiton dipped five cents to R71,80 after a strong rally in recent days.
AngloGold Ashanti added 1,12% or R2,18 to R197,20 and Gold Fields firmed 64 cents to R70,74. Harmony, however, lost 1,61% or 85 cents to R52,05.
AngloPlat slipped 1,11% or R2,51 to R223,99, but Impala improved three rand to R508.
On the industrial market, retailer Edcon bounced R1,70 to R269,50. JD Group jumped 1,5% or 96 cents to R65,01 and New Clicks leaped 2,41% or 21 cents to R8,91.
Pick ‘n Pay, however, weakened 1,11% or 25 cents to R22,25.
Massmart slumped 1,93% or 80 cents to R40,70 and Truworths slid 1,27% or 20 cents to R15,50.
Foschini fell 10 cents to R36,30. It earlier traded as high as R36,80 after it announced that sales for the three months from October to December 2004 were up by 20,2% compared with the same period the previous year, due to continued consumer confidence as a result of low inflation and interest rates.
Construction and engineering group Aveng nosedived 8,4% or R1,05 to R11,45, taking it 4,58% into the red for the month. Aveng shares traded at a best-to-date R13,50 last Wednesday.
Aveng said in a trading update on Tuesday that it anticipates headline earnings for the interim period to December 31 2004 to exceed that of the corresponding interim period ended December 31 2003 by between 40% and 60%.
Aveng also said that it has launched an offering of R1-billion, or $165-million, of guaranteed convertible bonds due in 2012.
“Aveng said a few weeks ago that earnings would be up between 69% and 80%, so the shares have been hammered. The bond should be good for them, but the market is focusing on the earnings,” the dealer explained.
Telecoms group Telkom was down 1,9% or two rand at R103,50, while MTN Group tumbled 2,81% or R1,21 to R41,80.
Although it was down in London, brewer SABMiller strengthened 40 cents to R96,70. The group said earlier that it saw strong volume growth for the third quarter, with beer volumes up 5% overall and South African beer volumes up 4%.
Soft-drink bottlers ABI achieved a volume growth of 6%, against year-to-date growth of 7%. South African volume growth was supported by good weather and continuing robust consumer spending.
On the financial index, London-listed Old Mutual ticked up five cents to R14,30. Real estate company Liberty International plc climbed 74 cents to R108,75.
Sanlam, however, slid 2,16% or 26 cents to R11,80.
Standard Bank slipped 2,01% or R1,20 to R58,60, FirstRand fell 2,25% or 29 cents to R12,61 and Nedcor surrendered 1,76% or R1,30 to R72,70. Absa was 1,1% or 80 cents in the red at R72. — I-Net Bridge