The JSE remained in the red at midday on Thursday, but platinum mining stocks bucked the trend, reflecting a strong platinum price. The JSE’s softer tone was on the back of weaker world markets and came despite the rand moving above the 6,60 per dollar level.
By noon, the all share index was off 1,27%, led by a 1,99% decline in the resources index and a 1,65% fall in the gold mining index. Industrials were off 0,83%, financials shed 0,75% and the banks index was 0,91% weaker.
The platinum mining index was the main positive feature, rising 1,72%.
The rand was bid at 6,63 per dollar from 6,55 when the JSE closed on Wednesday, while gold was quoted at $472,20 a troy ounce from $473,80/oz at the JSE’s last close.
“World market are generally down — the Dow was down yesterday, Asian markets were weaker this morning and generally European markets are down. We had an aggressive push yesterday [Wednesday] afternoon on the JSE and I think that might have been a bit overdone and now we have pulled back,” said an equities trader.
The market is now awaiting the decision on interest rates, which is due to be announced shortly after 3pm at the conclusion of the South African Reserve
Bank’s two-day Monetary Policy Committee meeting. All economists surveyed by
I-Net Bridge expect no change in interest rates.
On the local bourse, shares in resources group BHP Billiton were down 2,9%, or 280 cents, to R94,15, after the group said its net oil and gas production for the 2006 financial year was likely to be as much as 10-million barrels of oil equivalent less than its previous forecasts.
Anglo was off 2,84%, or 539 cents, to R184,61, but Kumba was up 69 cents to R95,89.
Kumba early on Thursday morning released details of a major black economic
empowerment deal which will result in the establishment of South Africa’s largest black owned, controlled and managed company with an enterprise value of around R16-billion.
The proposed transaction will see the partial separation of Kumba’s iron ore assets from its non iron ore assets into Kumba Iron Ore — a newly named company — and Newco — the reconstituted Kumba Resources pursuant to the transaction.
Newco is to be established as South Africa’s flagship empowerment company
and will continue to be listed on the JSE. It will be controlled by broad based
BEE groups via BEE Holdco, a black controlled holding company holding 55% of Newco.
Kumba Iron ore is to be created as a pure play iron ore company listed on the JSE with an enterprise value of around R14-billion, which through the unbundling to all existing Kumba Resources shareholders of the iron ore assets will hold the majority of Kumba Resources’ South African iron ore assets through Sishen Iron Ore Company, with Newco retaining a 20% stake in SIOC. In addition, Northern Cape based community groups will acquire a 3% interest in SIOC and SIOC employees will hold 3%.
A total of 80% of Kumba Resources’ interest in SIOC will be transferred to a newly named company, Kumba Iron Ore, and unbundled to all existing Kumba Resources shareholders.
“Kumba was down earlier, but has moved firmer. It was a very detailed announcement this morning and analysts are digesting it and have a few questions which they will ask at a conference call later this afternoon,” said a dealer.
Also in the news, retailer Edcon said that its sales for the 26 weeks ended October 1 2005 will be approximately 22% higher than the 27 weeks ended on October 2 2004. The group said that the comparable 26-week period sales would be 27% above last year.
Edcon added that as indicated in the prospects statement and reaffirmed in the July trading update, on this activity growth the group expects the growth in its diluted headline earnings per share for the 26 weeks ended October 1 to be between 25% and 30% higher than the 27 weeks ended October 2 2004.
Based on like-for-like trading weeks, diluted headline earnings per share will have risen between 35% and 40%. Earnings per share will reflect similar growth levels, it said.
Despite this, the company’s share price was off 39 cents at R29,91 at midday.
Gold counters were weaker amid a lower gold price. AngloGold Ashanti shed R3,90, or 1,37%, to R280, but was off its intrday low of R276,50, and Gold Fields fell R2,10, or 2,2%, to R93,50.
Among platinums, Angloplat was R10,85 firmer at R382, while Impala was up seven rand to R738. Barplats jumped 35 cents, or 4,35%, to 840 cents.
Nedbank and Absa both shed 120 cents to R87,30 and R87,15 respectively, but Standard Bank bucked the trend, adding one cent to R67,80.
Among the few shares to gain, Lonmin was up 49 cents to R153,50, AECI was up nine cents to R47,49 and Foschini collected five cents to R45,65.
On Wall Street on Wednesday, all three major indices closed at five-month lows.
The Dow Jones Industrial Average closed down 36,26 points at 10 216,91 as
the S&P 500 fell 7,19 points to 1 177,68. The Nasdaq Composite ended down 23,62 points at 2 037,47.
Tokyo share prices closed mixed, with some futures-related buying offset by the effect on sentiment of Wall Street’s slide overnight, dealers said.
The Nikkei 225 Stock Average ended the day down 14,50 points or 0,1% at 13 449,24, while the broader-based TOPIX index of all First Section issues
ended up 0,90 point or 0,1% at 1 407,79, AFX said.
European markets were also mostly lower by mid morning. – I-Net Bridge