After opening weaker in line with world markets, the JSE Securities Exchange had crept into positive territory just after noon on Wednesday. Dealers said that positive local sentiment stemming from the Barclays-Absa deal and the rand coming off its best levels were helping the local bourse.
By 12.19pm, the all share index was up a marginal 0,06%, while the all share industrial and financial indices firmed 0,13% and 0,16% respectively. The banks index was flat. Resources eased 0,1%, the platinum mining index was off 0,16% and the gold mining index lost 1,15%.
The rand was quoted at 6,17 per dollar from 6,16 when the JSE closed on Tuesday, while gold was quoted at $428,15 a troy ounce from $427,78/oz at the JSE’s last close.
“Foreign markets are dominating,” a dealer said.
“We saw a sell off in New York last night and European markets are concerned about growth in Germany and the UK. We have seen oil kick up as well.”
He said that rumours that hedge funds were in trouble had weighed on US markets, adding that there could be fallout in the UK as well. This was “giving the bears a bit of margin”.
The dealer said that the local market recouped its losses because it was still benefiting from positive sentiment stemming from Barclays’ formal offer for a 60% stake in Absa, which was announced on Monday.
The rand had come off its best levels seen earlier in the morning, which was also helping.
On the resources index, Anglo American dipped a marginal seven cents to R138,75, faring better locally than in London where it as down around 1%.
BHP Billiton was eight cents lower at R75,67.
AngloGold Ashanti shed 1,77% or R3,55 to R196,50 and Gold Fields fell 1,37% or 85 cents to R61. Harmony, however, was 1,04% or 40 cents better at R38,90.
A second dealer said that following Tuesday’s news that Harmony would not be raising or extending its bid for Gold Fields, it appeared that the transaction would not go through. Players who, expecting the deal to be completed, had gone long Gold Fields and short on Harmony were therefore switching out of their positions.
Petrochemicals group Sasol was 1,78% or R2,75 stronger at R157.
On the industrial index, telecoms group Telkom gained 1,07% or R1,20 to R113,20. Telkom said in a trading update on Tuesday that it expected its headline earnings per share to rise by between 35% and 55% for the year ending March 31 2005.
However, dealers said that this would put Telkom in line with expectations and that it was rumours of big dividend payments that were lifting the share.
London-listed brewer SABMiller jumped 1,17% or R1,10 to R95,50.
London-listed IT group Dimension Data rocketed 8% or 30 cents to R4,05 after it reported basic earnings per share of 0,5 US cents for the interim period ended March 2005, up from 0,1 US cents at the interim stage last year.
On the downside, brand management group Barloworld plunged 3,54% or R3,50 to R95,50. Before the opening, it reported headline earnings per share of 372 cents for the six months ended March 31 from 374 cents for the same period a year ago. The headline earnings per share were affected by a number of non-operational factors. These were the increased STC (secondary tax on companies) charge on the higher PPC special dividend, the non recurrence of the 2004 pension provision write back and a higher weighted average number of shares in issue.
An interim dividend of 130 cents was declared — an increase of 13%.
Pulp and paper producer Sappi was 1,28% or 80 cents softer at R61,60. Its subsidiary PPC tumbled 2,61% or R6 to R224.
Diversified industrial Imperial weakened 1,16% or R1,19 to R101,81.
On the financial front, London-listed Old Mutual firmed 1 cent to R15,05. It said in a trading statement before the opening that total life assurance sales on an annual premium equivalent (APE) basis had increased by 19% in sterling terms to £134-million compared with first quarter 2004.
In rand terms this was a 9% rise to R1,394-billion, the group said in a trading update.
Short-term insurer Mutual & Federal rallied 2,17% or 50 cents to R23,50. It said in a trading update that it had reported “satisfactory” underwriting profitability for the first three months of its financial year (covering the January-March period), saying it remained “cautiously optimistic” regarding the outturn for the year as a whole.
Banking group FirstRand firmed 10 cents to R14, but Standard Bank fell 20 cents to R65,35 and Nedcor retreated 30 cents to R76,40. – I-Net Bridge