The JSE reached a new high on Wednesday, buoyed by rampant precious metals prices. Players were jittery, however, on concerns that the market was ripe for a correction after a phenomenal run.
By 12:02pm, the all share index was up 0,75% at 22 077,62 having reached a record high of 22 150,609 at the opening. Resources rallied 1,72%, with the gold and platinum mining indices surging 3,66% and 4,59% respectively.
Industrials were flattish (-0,03%). While financials fell 0,21%, the banks index was 0,2% better.
The rand was bid at 6,04 per dollar, little changed from when the JSE closed on Tuesday, while gold was quoted at $702,45 a troy ounce from $695,50/oz at the JSE’s last close. Gold earlier traded at a highest level since late 1980 of 704,78/oz. Platinum was quoted at $1 260,50/oz. It earlier reached a record high of $1 265/oz.
”The JSE is almost entirely resources driven. Gold and platinum are incredibly strong which is having an uplifting effect on the market. But we could be stronger given where metals prices are. The market is very nervous that the market is primed for a sharp correction and strength in resources is not flowing through to other sectors,” a dealer said.
A second dealer agreed.
”A lot of investors are sitting on the sidelines — they don’t know what to do. I think most of the action is in options and futures or coming from offshore. The natural flow in this market is very small.”
She continued that there had been a lot of corporate results out on Wednesday but with a couple of exceptions — junior miner Western Areas being the most notable — market reaction had been minimal.
On the resources index, London-listed diversified resources group Anglo American added R2,25 to R284,80 and BHP Billiton was 1,06% or R1,42 better at R135,03.
Petrochemicals group Sasol climbed R2,25 to R276,74.
Gold Fields soared 5,15% or R7,40 to R151,15, AngloGold Ashanti advanced 2,998% or R10,05 to R346,05 and Harmony was 3,33% or R3,26 higher at R101,25.
Western Areas dived 6,62% or R2,88 to R40,61. When it released its quarterly results on Wednesday, Western Areas said that an accident earlier this month at its joint-venture South Deep mine would put the main shaft out of commission for nine months to a year, slashing the mine’s production by half. As a result Western Areas plans to issue shares to raise funds.
Impala Platinum leaped 4,97% or R63,90 to R1 350 and AngloPlat rocketed 5,22% or R35,37 to R713,42. The counters earlier traded at all-time highs of R1 365 and R723 respectively.
On the all share industrial index, brand management group Barloworld was 1,8% or R2,30 in the black at R130,30.
PP Cement, in which Barloworld holds a majority stake, was R3,99 stronger at R434.
PPC earlier reported a 52% increase in headline earnings per share to 922 cents for the six months ended March 31 from 607 cents the same period a year ago. An interim dividend of 330 cents per share was declared.
Mittal Steel was 1,38% or one rand stronger at R73,50 and pulp and paper producer Sappi firmed 75 cents to R87.
Retailer Mr Price rang up 2,04% or 46 cents to R23,06 after it said in a trading statement that its basic, headline and core earnings per share for the 53 weeks ended March 2006, were expected to be between 40% and 50% higher than the adjusted figures for the year ended March 2005.
On the downside, London-listed IT group Dimension Data tumbled 2,49% or 15 cents to R5,88. Before the opening, it reported basic earnings per share of 1,9 US cents for the six months ended March after a restated 0,6 cents for the same period a year earlier. On a diluted basis, EPS were 1,8 cents.
Turnover grew by 15,9% to $1,45-billion, while gross profit increased by 10,3% to $299-million and operating profit rose by 33,.3% to $37,4-million.
Cellular network operator MTN gave up 1,18% or 75 cents to R63. Telkom lost R1,21 to R141,99.
Retailer Spar retreated 1,27% or 50 cents to R38,89. It earlier reported a 16,8% increase in headline earnings per share to 121,7 cents for the six months ended March from a restated 104,2 cents at the interim stage last year.
Revenue rose 22,6% to R8,2-billion from a restated R6,7-billion.
A dividend of 48 cents per share was declared, representing a 60% increase in the dividend paid at the interim stage last year.
Spar also said that its CEO Peter Hughes would be retiring at the end of the year. He will be replaced by the current managing director of Spar Group’s KwaZulu-Natal division, Wayne Hook.
On the financial front, London-listed Old Mutual fell 2,05% or 46 cents to R21,95. It said before the opening that funds under management had grown £248-billion in the first quarter, thanks to positive equity markets across all of its geographies and increased sales.
Liberty Group lost 50 cents to R83,50.
Nedbank was R1,20 better at R137,20 and Absa added 51cents to 119.31 rand. – -Net Bridge