The JSE Securities Exchange (JSE) was firm across the board in noon trade on Friday — this despite a firmer rand and the fact that United States stocks ended lower on Thursday.
At noon, the all-share and all-share industrial indexes were up 0,78% and 0,38% respectively, while financials were 0,49% stronger. The banks index, however, was flat — a paltry 0,01% higher. After taking a hammering on Wednesday, resources were 1,43% stronger, while the platinum-mining index was up 0,65% and the gold-mining index was up 0,46%.
The rand was quoted at R6,08 per dollar compared with R6,13 when the JSE closed on Thursday, while gold was quoted at $433,55 a troy ounce from $432,40/oz at the JSE’s last close.
“The market is holding up quite nicely and is firm across the board. Volumes are pretty average though,” an equities trader said.
“After getting hammered yesterday [Thursday], we’re seeing a bit of bargain-hunting today. So the market is firmer despite the stronger rand and the fact that US markets were weaker overnight,” another trader said.
US stocks ended lower on Thursday, with the Nasdaq touching its lowest point in more than six months after news pointing to a slowdown in the economy and a pick-up in inflation.
Worries over the economy eclipsed a round of solid earnings reports, led by blue-chip companies like Procter & Gamble.
The Dow Jones Industrial Average fell 128,43 points, or 1,3% to 10 070,37.
The Nasdaq Composite Index was down 26,25 points, or 1,4% at 1 904,18, its lowest close since October 14 2004. The S&P 500 Index dropped 13,16 points, or 1,1% to 1 143,22.
A weaker-than-expected gross domestic product report for the first quarter set the negative tone for the session.
The US economy grew at a 3,1% seasonally adjusted annual rate in the first quarter of 2005, the slowest growth in two years, the Commerce Department said. Economists had been expecting gross domestic product to increase 3,6%.
In noon trade on Friday, London-listed diversified resources group Anglo American was 280 cents higher at R134,70, while BHP Billiton was 119 cents or 1,63% better at R74,20.
Petrochemicals group Sasol was up 150 cents to R142,50.
Among gold shares, AngloGold Ashanti was down 74 cents, or 0,38%, to R193,76, while Gold Fields was up 1,1% or 65 cents to R60.
World number two gold-miner AngloGold Ashanti on Friday reported a 63% decline in headline earnings per share for its March 2005 quarter to 39 cents, from 104 cents in the December 2004 quarter.
Analysts had expected a marginal increase in headline earnings per share to 68 cents, with forecasts ranging from 55 cents to 78 cents.
The group reported basic earnings per share of 19 cents for the March quarter, down 78% from the previous quarter, while headline earnings adjusted for the effect of unrealised non-hedge derivatives fell 41% to 175 cents, from 296 cents.
AngloGold Ashanti gold output fell by 5% to 1,569-million troy ounces in the March quarter, from 1,651-million oz in the previous quarter.
Following its long-planned closure, the group’s Ergo mine in South Africa was being treated as a discontinued operation and the December 2004 quarter’s numbers had been restated to exclude Ergo.
The group also attributed the decline in production to lower South African production and usually strong performances during the December 2004 quarter at its 40%-held Morila mine in Mali and Cerro Vanguardia in Argentina, in which AngloGold Ashanti has a 92,5% stake.
Paper company Sappi fell by 6,53% or 440 cents to R62,99 despite reporting a strong rise in its headline earnings per share for the six months to the end of March 2005 to 18 US cents versus nil in the year-earlier period.
Earnings before interest, tax, depreciation and amortisation (Ebitda) improved to $301-million from $287-million the previous year on a rise in sales to $2,48-billion from $2,31-billion.
Announcing its six-month and second-quarter results on Friday, Sappi said operating profit declined for the six months to the end of March, to $51-million from $56-million the previous year.
As a percentage of sales, operating profit was 2,1% versus 2,4% previously. Both operating profit and Ebitda for the six months was reduced by $42-million in respect of asset impairments, the group noted.
Headline earnings per share for the quarter to the end of March improved to 12 US cents, from six US cents in the December quarter and 10 US cents a year earlier.
The group’s return on average equity came in at a negative 0,6% for the six months, compared with -0,1% the previous year, but was reported at 4,2% for the quarter to the end of March.
Among the other industrials, the world’s second-biggest brewer, SABMiller, also came under some pressure, falling 199 cents or 2,19% to R89,01.
Among banks, Absa was down 40 cents or 0,51% to R77,90 a share. United Kingdom banking group Barclays was quoted on Thursday as saying it is not confident that it currently has enough shareholder support to secure a majority stake in Absa, South Africa’s biggest retail bank. — I-Net Bridge