The JSE Securities Exchange was higher in noon trade on Tuesday, bouncing in line with world markets. However, buying was not aggressive and volumes remained light.
At 11.58am, the all share index was up 0,36%. Industrials and financials firmed 0,16% and 0,31% respectively. Resources climbed 0,61% and the platinum mining index perked up 0,66%, while the gold mining index inched 0,07% higher.
The banks index dipped 0,14%.
The rand was quoted at 6,24 per dollar from 6,25 when the JSE closed on Monday, while gold was quoted at $426,90 a troy ounce from $426,65/oz at the JSE’s last close.
“I’m a bit disappointed that there wasn’t more of a bounce in New York last night, but I don’t think there is panic in markets,” a dealer said.
“People accepted there was a need for a correction, which has taken place, and are thinking the worst is over.”
He added that no one was rushing to get into the market. However, with the world economy still in reasonably good shape, the oil price stabilising and companies likely to grow, the dramatic fall in the market was not really justified in terms of fundamentals.
“I would have liked the bounce to have been much stronger, but as confidence gathers, this might happen.
“The market is very quiet and the buying is not aggressive, which is a little disturbing.”
Dealers said that that the empowerment deal, which will see 12,75% of Old Mutual’s South African businesses placed in black hands, was the main feature of the morning.
In terms of the deal, Old Mutual will issue new ordinary shares to black controlled entities beneficially owned by its black employees (39%), clients and distributors (27%), communities (10%) and its black business partners (24%) to the value of 13.48% of Old Mutual (SA), 11.50% of the value of Nedcor’s South African business and 11% of Mutual & Federal.
The total value of all the shares to be issued under this proposal is R7,2-billion, R7,1-billion of which will go to black shareholders.
The total number of shares to be issued under the BEE deal will equate to 5,64% of Old Mutual, 9,47% of Nedcor and 11,14% of Mutual & Federal.
Old Mutual said its new BEE partners included women’s empowerment group Wiphold and listed BEE investment group Brimstone heading consortia for stakes in Old Mutual and Nedcor, as well as Wiphold and BEE group Mtha-we-Mpumelelo in Mutual & Federal.
Brimstone N shares were the market’s top performer, rocketing 11,11% or 20 cents to two rand.
Old Mutual jumped 1,85% or 27 cents to R14,87 and Nedcor leaped 2,59% or R1,89 to R74,90.
Mutual & Federal shares were unchanged at R21.
Liberty Group rallied 2,58% or R1,54 to R61,29, but Sanlam dipped three cents to R11,69.
While Absa added 60 cents to R77,60, Standard Bank shed 50 cents to R61,10.
On the resources index, petrochemicals group Sasol was 1,2% or R1,70 stronger at R143,90.
BHP Billiton was 70 cents better at R78,50 and Anglo American ticked up 40 cents to R142,30.
Diversified miner Kumba tumbled 2,32% or R1,49 to R62,85.
Gold Fields gained 50 cents to R66,50, but Harmony weakened 1,79% or 80 cents to R44.
AngloPlat was up 2,08% or five rand at R245.
Industrials to advance included pulp and paper producer Sappi, which perked up 1,01% or 70 cents to R69,75.
Food group Tongaat surged 2,51% or R1,30 to R53. Media group Naspers rallied 2,21% or R1,61 to R74,50.
While Telkom gained R1,01 to R107, the MTN group surrendered 40 cents to R43,10.
Retailer Foschini firmed 2,56% or 85 cents to R34, but Edcon weakened R2,20 to R261,75.
Shoprite was 1,03% in the black at R13,74.
Pick ‘n Pay was unchanged at R23,10 after releasing results before the opening, although the dealer noted that it was one of the few bright spots on the market on Monday.
It reported a 20,6% increase in its headline earnings per share (HEPS) for the year to end-February 2005, to 141,54 cents from 117,38 cents the previous year.
The group declared a final dividend of 76,70 cents per share, up 20,.8% from the 63,50 cents per share declared a year earlier, for a total dividend for the year of 96.5 cents. This is 20,6% higher than the 80 cents per share distributed in 2004.
The results are in line with market expectations. A consensus of seven investment analysts surveyed by I-Net Bridge had forecast HEPS of 135 cents and a total dividend of 95,7 cents per share. The range of earnings forecasts was from a low of 133,3 cents to a high of 164,2 cents per share. – I-Net Bridge