The JSE Securities Exchange was weaker just after noon on Wednesday, with heavyweight dual-listed stocks coming under pressure offshore. The losses came despite a softer rand.
By 12.17pm, the all share index shed 0,43%. Resources retreated 1,12%, with the gold and platinum mining indices losing 1,26% and 1,03% respectively. Financials dipped 0,13% and the banks index surrendered 0,5%. The all share industrial index was flat.
The rand was quoted at 5,90 per dollar from 5,85 when the JSE closed on Tuesday, while gold was quoted at $431,30 a troy ounce from $433,75/oz at the JSE’s last close.
“The market is looking pretty grotty, even though the rand is weak,” a dealer said.
He added that European markets were also weaker and dual-listed resources stocks were under pressure in London.
“There seems to be a contagion effect, which is affecting the whole market,” he commented.
The dealer said that retail sales released locally, coupled with Tuesday’s private sector credit extension numbers, had some players doubting whether there would be a rate cut next month.
This was weighing on some of the banking and retail stocks.
“If there isn’t a cut, I think we are going to see downgrades in a couple of these stocks,” he said.
South Africa’s real retail sales rose to a 12,3% year-on-year (y/y) increase in December after increasing by a revised 11,1% y/y (original estimate was a 12,6% y/y increase) in November following October’s record revised 12,9% y/y (original estimate was 12,8% y/y) in October, Statistics South Africa said on Wednesday.
This brought real retail sales growth for 2004 to 10,3% compared with 4,9% in 2003 and 2,3% in 2002.
The dealer continued that overall, some profit taking was inevitable after the JSE’s rally to record highs in recent sessions.
“There had to be some kind of a pullback and guys needed to find reasons for one. The market has been too overheated — it was ramped up with no rhyme or reason,” he commented.
On the resources index, BHP Billiton tumbled 2,02% or R1,72 to R83,30 and petrochemicals group Sasol slid 1,35% or R1,95 to R143.
Gold Fields fell 1,43% or one rand to R69 and Harmony was 1,02% or 50 cents lower at R48,50.
AngloPlat weakened 1,27% or R2,90 to R226 and Impala was off R4,53 at R495,50.
Anglo American dipped 20 cents to R145,20.
On the industrial market, Swiss-listed luxury goods group Richemont rose 1,08% or 20 cents to R18,76.
Pulp and paper producer Sappi perked up 60 cents to R79,30.
Retailer Mr Price bounced 4,45% or 49 cents to R11,50 after plunging over 8% on Tuesday.
Shoprite was 1,04% or 15 cents stronger at R14,55.
Woolies, however, weakened 1,83% or 19 cents to R10,21 rand and Edcon was R1,10 in the red at R289.
Services group Bidvest slumped 2,7% or two rand to R72 and telecoms group Telkom gave up 1% or R1,15 to R114,15.
On the financial front, life assurer Liberty Group jumped 1,56% or R1,02 to R66,50. Before the opening, it reported a 33% leap in headline earnings per share from 346,4 cents to 460,4 cents for the year ended in December.
This exceeded the I-Net Bridge consensus forecast of 455 cents per share for the 12-month period.
The group declared a final dividend of 153 cents per share — a 32% increase on DPS of 116 cents a share the previous year. This brings the total dividend for the year to 315 cents (2003: 278c), which also exceeded the I-Net Bridge consensus forecast of 305 cents.
African Life surged 3,39% or 75 cents to R22,90.
While Sanlam was one cent in the red at R13,55, it earlier traded at a lifetime high of R13,75.
Commercial bank Absa, however, shed R1.14 to R79,56 and Standard Bank surrendered 50 cents to R63,10. – I-Net Bridge