The JSE was in negative territory in noon trade on Thursday after lack of inspiration from offshore and softer commodity prices acted in concert to take the stocks lower. However, retailer Edcon rocketed to a record high on news of an offer for the company.
By 12.08pm, the all-share index shed 0,35%. Resources retreated 0,55%, with the gold- and platinum-mining indices losing 0,92% and 1,64% respectively. Industrials dipped 0,1%, financials fell 0,55% and the banks index was 1,25% in the red.
The rand was bid at 7,15 per dollar from 7,17 when the JSE closed on Wednesday, while gold was quoted at $648,75 a troy ounce from $653,95/oz at the JSE’s last close.
A dealer said that the JSE had initially taken its cue from weaker Asian markets.
“The Nikkei was flat, but when we opened the Hang Seng was down sharply. There was a big turnaround and it closed 55 points higher, but we haven’t recovered in line at all.”
He continued that on the whole, world markets were flat and were not giving local investors much reason to enter the market.
The dealer said that technically, there was a view that the Dow was due for a correction.
“Everyone is talking about this so one might find that it becomes self-fulfilling,” he commented.
He added that gold had broken below the $650/oz level and commodities in general were under pressure. This was weighing on the JSE.
However, Edcon was by far the feature of the day.
“Over 11-million shares have traded,” he noted. “It was a big offer and the market has responded. But no salient dates were given, which is why it is trading at a discount to the offer price.”
Edcon shares, which traded as high as R45 in early trade, were up 10,78% or R4,30 at R44,20. The company announced before the opening that its board had unanimously recommended to shareholders an offer from Bain Capital to acquire its entire ordinary share capital at R46 per share.
“In line with its commitment to value creation for shareholders, the board brings to a close a global auction process. The total value of the transaction will be R25-billion,” it said in a statement.
Completion of the transaction will result in the de-listing of Edcon shares from the JSE.
Shareholders will receive the purchase consideration in cash.
Edcon said shareholders would be advised of important dates and times of the schemes in due course.
Other advancers on Thursday included Truworths, which rallied 2,65% or 90 cents to R34,80.
Mr Price rebounded 3.51% or R1 to R29,49.
Furniture retailer JD Group jumped 1,54% or R1,35 to R89,25.
Media group Caxton bounced 3,59% or 62 cents to R17,88 and Naspers climbed R1,50 to R188,49.
London-listed brewer SABMiller was 94 cents stronger at R166,32.
Short-term insurer Mutual & Federal firmed 2,11% or 60 cents to R29.
Before the opening, it reported a decline in diluted headline earnings per share to 344 cents for the year ended December from 572 cents a year ago. Headline earnings per share were down 39% to 361 cents versus 592 cents before.
However, the company said it would issue fully paid ordinary shares as a capitalisation award, or a cash dividend alternative of 135 cents per share.
Global resources group BHP Billiton was 50 cents better at R146,40, but Anglo American eased R1,20 to R345,80.
Petrochemicals group Sasol slipped R1,70 to R245,30.
Gold Fields fell 1,44% or R1,29 to R120,23 and Harmony was 1,29% or R1,21 lower at R92,49. AngloGold Ashanti was R1 softer at R339.
Impala Platinum tumbled 2,4% or R5 to R203, while AngloPlat slipped R8,56 to R896,44.
Swiss-listed luxury goods group Richemont surrendered 1% or 41 cents to R40,49.
Services group Bidvest gave up 1,43% or R2,01 to R138,99 and transport and logistics group Imperial lost 1,02% or R1,70 to R165.
Hospital group Netcare tumbled 2,67% or 40 cents to R14,60.
Standard Bank was down 1,24% or R1,25 to R99,90, FirstRand slid 1,8% or 42 cents to R22,88, Absa weakened 1,2% or R1,60 to R132 and Nedbank was R1 in the red at R139,50. — I-Net Bridge