The JSE Securities Exchange (JSE) raced to a record high of 12Â 904,090 on Tuesday morning when a weaker rand fuelled a rally in heavyweight resources stocks. The currency had the opposite effect on banks, which led the market’s downside.
At 11.59am, the all-share index was up 0,52% at 12,865,220. Resources surged 2,17% and the platinum-mining index jumped 1,1%. Financials fell 0,62%, with the banks index sliding 1,79%. Industrials eased 0,12% and the gold-mining index dipped a marginal 0,08%.
The rand was quoted at R6,02 per dollar from R5,96 when the JSE closed on Monday, while gold was quoted at $422,30 a troy ounce from $421,70/oz at the JSE’s last close.
“It is definitely a rand play,” a dealer said.
He added that the rand was already weaker on the back of a stronger dollar when “terrible” Investec PMI numbers, which were rand negative, were released.
While the rand was lifting resources stocks, currency-related selling was coming into the banking sector.
Data released at 11am showed that South Africa’s seasonally adjusted Investec purchasing managers index (PMI) fell to 49,3 in January from 53,2 in December and a recent peak of 59,1 in September. This was the first fall below the 50 break-even level since October 2003.
The PMI is an index modelled on the Institute of Supply Management index of the United States, which measures manufacturing activity. The break-even level is 50, so a reading above 50 implies expanding manufacturing activity, while one below implies manufacturing is contracting.
“The index has now fallen to below the critical level of 50, suggesting a mild contraction in manufacturing is under way,” said André Roux, head of fixed income at Investec Asset Management.
“The acceleration in manufacturing activity over the first three quarters of 2004 appears to have run out of steam. Manufacturers are evidently under pressure in export and import competing markets, with the strong rand and soft global growth taking their toll. Buoyant domestic demand conditions are not able to offset these negatives,” Roux said.
On the JSE’s upside, global resources group BHP Billiton rocketed 3,96% or R2,89 to R75,80. It earlier traded at a best-to-date R75,95.
Anglo American advanced 2,64% or R3,65 to R141,65.
AngloPlat leaped 2,08% or R4,49 to R220 and Impala climbed R2,40 to R502.
Telecoms group Telkom was a feature, firming to a highest-to-date R111,80. It was last quoted at R109,75, up 1,11% or R1,20 from its previous close.
The dealer said that Telkom was being boosted by the news that value-added service providers (Vans) will not be able to build their own networks. “The Vans will have to piggyback off existing networks, which will obviously benefit Telkom in the short term.”
Cellular network operator MTN Group gained 36 cents to R45,35.
Steel producer Ispat Iscor soared 2,08% or R1,21 to R59,25 and London-listed brewer SABMiller was 33 cents stronger at R91,99.
On the financial front, investment trust Remgro rose 1,28% or R1,20 to R95,20.
Life assurer Liberty Group was 2,08% or R1,35 in the black at R66,40.
On the downside, Standard Bank tumbled 2,19% or R1,42 to R63,39. FirstRand fell 1,9% or 26 cents to R13,39, Absa shed 1,03% or 79 cents to R75,60 and Nedcor eased 35 cents to R72,45.
Pulp and paper producer Sappi plunged 3,01% or R2,30 to R74 and services group Bidvest dropped 1,87% or R1,50 to R78,50.
Afgri nosedived 8,51% or 49 cents to R5,27. The group said after the close on Monday that it expects headline earnings per share for the 2005 year to be in the region of 20% to 30% lower than the adjusted pro forma headline earnings for the 2004 year of 73,3 cents.
Retailer Pick ‘n Pay plummeted 2,93% or 70 cents to R23,20, Edcon slipped 2,17% or R6,49 to R293,01 and Truworths retreated 2,06% or 35 cents to R16,65.
Gold miner Gold Fields gave up 25 cents to R68,15 and Harmony weakened 18 cents to R49,12. — I-Net Bridge