The JSE was marginally weaker in noon trade on Wednesday, with heavyweight resources stocks coming off. Overall, the market was lacklustre ahead of Finance Minister Trevor Manuel’s Budget speech at 2pm.
By 12.06pm, the all-share index eased 0,12%. Resources retreated 0,59% and the gold mining index slipped 0,34%, but the platinum mining index picked up 0,73%. Industrials inched 0,06% higher, with the financial and banks indices firming 0,28% and 0,14% respectively.
The rand was bid at 7,12 per dollar from 7,11 when the JSE closed on Tuesday, while gold was quoted at $657,75 a troy ounce from $664,10/oz at the JSE’s last close.
“The surprise interest rate hike from the Bank of Japan put a bit of a dampener on global sentiment,” said Cortex derivatives trader Lavan Gopaul. “It was an announcement we were expecting later in the year but a surprise like this catches everyone off guard.”
The Bank of Japan on Tuesday announced its second interest rate hike in eight months, raising overnight lending rate to 0,5%.
Gopaul continued, however, that the JSE’s most important driver for the day thus far had been Anglo American’s results released before the opening.
“The results were excellent. We were expecting good results and were happy to see them coming through at these levels,” he said. “But I think the stock price might have overshot itself ahead of the results. Anglo has come off and is dragging the index down as a consequence.”
He said that weakness was spreading from Anglo to BHP Billiton. The lower gold price was also hurting gold shares.
However, none of these falls was too dramatic, he emphasised. Gopaul said that ahead of Manuel’s budget speech, the market was a bit quiet.
While Gopaul was hoping for a market positive budget, the market was a bit wary.
He noted that after last year’s budget, petrochemicals group Sasol was knocked after Manuel mentioned a potential windfall tax on the synthetic fuel industry for the first time.
In morning trade, Anglo American shares lost 1,04% or R3,74 to R356,25 and BHP Billiton weakened R1,39 to R150,06.
Anglo generated another record set of earnings for the financial year to end-December 2006, announcing a 45% increase in underlying earnings per share to $3,73, amid record prices and strong performances in its divisions.
A final dividend of 75 cents per share was declared, bringing the total dividend for the year to 108 cents.
The company also paid a 67 US cent special dividend following its sale of a portion of its AngloGold stake.
It said it would purchase a further $3-billion of the company’s shares as part of its share buy-back programme as the company generates excess cash due to historically high commodity prices.
Sasol was R2,25 softer at R251,75.
While AngloGold Ashanti shed R2,05 to R329, Impala Platinum improved R1,76 to R199,51.
Mittal Steel slid 1,68% or R2,01 to R117,49 after reporting a decline in diluted headline earnings per share (HEPS) to 1 041 cents for the year ended December 2006 from 1 137 cents a year earlier. Basic HEPS were 1 042 cents from 1 139 cents before.
The group declared a final dividend of 204 cents per share, up from 140 cents a year ago. Together with the interim dividend, the total dividend amounted to 347 cents compared with 380 cents a year ago.
According to an I-Net Bridge consensus forecast, Mittal was expected to report HEPS of 1 113,1 cents per share, while the dividend was expected to come
in at 371,2 cents per share.
Assore, by contrast, surged 5,26% or R10 to a record high of R200 after it announced that headline earnings for the six months ended in December had increased by more than 100% from R146,6-million to R298,5-million.
This translated into headline earnings per share of 1 102,3 cents, more than double the 523,5 cents reported for the previous comparable half-year.
The interim dividend proposed by the group increased from 80 cents to 150 cents per share.
Swiss-listed luxury goods group Richemont rose 26 cents to R41,13.
Services group Bidvest was 2,04% or R2,82 better at R141,32 after touching a record high of R145,20.
After coming under pressure in late trade on Friday, retailer Mr Price rebounded 7,07% or R1,09 to R16,50.
London-listed financial services group Old Mutual firmed 25 cents to R25,50.
Banking group FirstRand firmed 1,06% or 25 cents to R23,75 and Absa added 80 cents to R139. Standard Bank, however, slipped 40 cents to R104,10 and Nedbank was down 50 cents at R143,40. – I-Net Bridge