The JSE Securities Exchange (JSE) was stronger across the board at midday on Monday, with Barclays’ confirmed bid for Absa boosting banking shares. A weaker rand gave the broader market a lift.
By 12.05pm, the all-share index added 1,47%. The financial and banks indices firmed 1,99% and 2,87% respectively. Resources rose 1,68%, the gold-mining index jumped 2,42% and the platinum-mining index perked up 0,64%.
The rand was quoted at R6,10 per dollar from R6,04 when the bourse closed on Friday, while gold was quoted at $425,55 a troy ounce from $425,10/oz at the JSE’s last close.
“Absa is the main story. The market obviously likes the deal — Absa is trading slightly above the offer price, although this excludes the dividend,” a dealer said.
He added that the weaker rand was also helping the market. Dual-listed heavyweights Anglo American and BHP Billiton were up in London, adding to the positive picture.
Before the opening, Barclays made its formal bid for a 60% shareholding in Absa, offering R82,50 per Absa share. Ordinary shareholders will also receive the Absa final dividend of R2 per share. The deal values Absa at R33-billion.
This represents an increase over the original bid of R79 per share and a dividend of R1,80.
In morning trade, Absa shares touched a best-to-date R82,90. They were last quoted at R82,60, making for a 3,25% or R2,60 gain from Friday’s close.
Standard Bank, which earlier traded at a lifetime high of R67,95, was 3,06% or R1,99 stronger at R67.
FirstRand firmed 2,53% or 35 cents to R14,20 and its major shareholder, RMB Holdings, rallied 3,63% or 80 cents to R22,85.
Financial services group Sanlam was 1,6% or 19 cents stronger at R12,10 and investment trust Remgro gained 2,22% or R2,10 to R96,50.
Sanlam and Remgro have agreed to sell their respective stakes in Absa, which total 28%.
London-listed financial services group Old Mutual firmed 1,5% or 22 cents to R14,87.
On the industrial index, retailer Pick ‘n Pay leaped 1,5% or 37 cents to R24,97 and Shoprite surged 2,63% or 39 cents to R15,20. Pick ‘n Pay and Shoprite earlier traded at all-time highs of R25,15 and R15,25 respectively.
Edcon was up 3,35% or nine rand at R278 and Woolies soared 3,96% or 40 cents to R10,50.
Pulp and paper producer Sappi was 3,34% or R1,99 stronger at R61,50.
Hospital group Netcare reached a best-to-date R5,93 and was last quoted 1,37% or eight cents in the black at R5,93.
Netcare said on Friday that it expects earnings per share and headline earnings per share for the six months ended March 31 2005 to improve by between 20% and 30% from the comparable prior period last year.
Gold stocks put in a strong showing, with Gold Fields up 4,04% or R2,35 at R60,50. Harmony bounced 2,22% or 81 cents to R37,31 and AngloGold Ashanti added 1,71% or R3,30 to R196.
London-listed diversified resources group Anglo American advanced 1,87% or R2,60 to R141,35 and BHP Billiton was 1,31% or one rand better at R77,45.
Petrochemicals group Sasol was 2,13% or R3,20 stronger at R153,25.
On the JSE’s downside, telecoms group Telkom eased 21 cents to R107,80 and cement producer PPC weakened R1,40 to R232,50.
Junior miner Western Areas was 1,26% or 30 cents in the red at R23,50. — I-Net Bridge