The JSE Securities Exchange (JSE) was stronger in noon trade on Tuesday as SABMiller’s announcement before the opening that it was acquiring a controlling interest in Bavaria in Latin America lifted traders’ spirits. Dealers said that while there were pockets of profit-taking on the bourse, overall sentiment remained positive.
By 11.57am, the all-share index added 0,33%. The all-share industrial index jumped 0,99%, while the platinum-mining index was 0,25% higher. Financials inched up 0,07% and the banks index was flat (+0,02%). Resources eased 0,16% and the gold-mining index was 0,29% softer.
The rand was bid at R6,69 per dollar from R6,65 when the JSE closed on Monday, while gold was quoted at $420,13 a troy ounce from $421,45/oz at the JSE’s last close.
“The market is pumping. SABMiller is the major source of strength. The deal has been spoken about a lot so it isn’t a surprise. But the fact that SABMiller is going into a high growth area and that Bavaria is a good company is seen as enhancing,” a dealer said.
He noted that it was a big deal, worth about a third of SABMiller’s new market capitalisation. It would significantly reduce South Africa’s contribution.
SABMiller shares surged to a lifetime high of R111,79 on the news and were last quoted at R111,56, still up 7,33% or R7,62.
SABMiller said before the opening that it has successfully negotiated a $7,8-billion deal with Colombia’s Santo Domingo Group (SDG), which will see SABMiller obtaining a controlling interest in Bavaria South America, the second-largest brewer in South America.
The transaction, which has been several months in the making after stiff competition between SABMiller and Heineken for Bavaria, will see SABMiller issue 225-million new shares to the value of $3,5-billion to the SDG, resulting in the SDG owning an economic interest of approximately 15,1% in SABMiller and SABMiller obtaining an indirect 71,8% interest in Bavaria.
“The rest of the market started off sloppy, but subsequent to that it has been pushing higher,” the dealer continued. “Broadly speaking, it is very strong, although there are pockets of profit-taking here and there.”
He said that while resources were down, the weaker rand was paring their losses.
Other advancers on Tuesday included Mittal Steel, which strengthened 1,61% or 80 cents to R50,60.
Petrochemicals group Sasol climbed R1,30 to R201,30.
Retailer Edcon rose to a record high of R330. It was last quoted one rand in the black at R324. Truworths rose 1,37% or R25 to R18,50.
City Lodge Hotels soared 7,82% or R2,90 to a lifetime high of R40, although only 215 shares had traded in one deal.
Aspen Pharmacare advanced 1,28% or 35 cents to R27,60. It traded at a new high of R27,70 after it said that Merck Sharp & Dohme South Africa had granted it a non-exclusive, royalty-free patent licence for the manufacture and supply of a generic version of anti-retroviral efavirenz — used for the treatment of HIV/Aids.
Banking group Absa was up 1,38% or R1,20 at R88,20, having earlier traded at a best-to-date R89.
FirstRand was 11 cents firmer at R15,26.
Microlender Abil added 1,96% or 37 cents to R19,27.
Impala Platinum perked up R4,50 to R616,50 and gold-miner Gold Fields gained 20 cents to R73,70.
On the market’s downside, Anglo American lost R1,20 to R155.
AngloGold Ashanti shed R1,74 to R236,50 and Harmony was off 25 cents at R55,20.
Swiss-listed luxury goods group Richemont weakened 18 cents to R23,17.
Cellular network operator MTN Group surrendered 40 cents to R49,60 and retailer Shoprite retreated 1,67% or 25 cents to R14,75.
While transport and logistics group Imperial was 45 cents lower at R114,55, it earlier touched a record high of R116.
Standard Bank slipped 60 cents to R69,40 and Nedbank was 1,01% or 85 cents in the red at R83,65. — I-Net Bridge