/ 4 September 2007

Local deals help lift JSE

The JSE was a bit firmer by midday on Tuesday as a number of local deals buoyed sentiment for buyers.

The local bourse was also getting positive direction from the FTSE, which was down in early trade, but recovered during the morning.

By midday on the JSE, the all-share index was up 0,30%. Resources added 0,85%, the gold-mining index rose 0,55% and the platinum-mining index firmed 3,10%. Industrials lost 0,29%, but financials collected 0,18% and banks recovered 0,63%.

The rand was bid at 7,24 to the United States dollar from 7,17 when the JSE closed on Monday, while gold was quoted at $673,85 a troy ounce from $672,20/oz at the JSE’s last close.

“All the deals that have been announced — like Gold Reef, MTN and Telkom, Anglo Platinum, Mvela and Anooraq — are helping stabilise the market. We are also taking a cue from the FTSE, as it was down this morning, but has turned and is up right now,” said a local equities trader.

“US consumer data is also expected to be released later today [Tuesday], and if the data is steady, Wall Street should pick up, offering further direction.”

Among resource stocks on the JSE, Anglo American added R2 to R416,50 and BHP Billiton recovered 81 cents to R209,80.

Petrochemical giant Sasol rose R1,60 to R289,60.

Anooraq Resources shot up 7,95%, or R1,90, to R25,80 and Mvela Resources climbed 2,85%, or R1,60, to R57,70.

In a long-awaited announcement, Anglo Platinum said it has reached agreement with Anooraq and Mvela Resources on transactions that will result in the creation of two substantial, historically disadvantaged South African-managed and controlled South African platinum group metal producers, with critical mass and significant growth potential.

The deal effectively transforms the platinum industry in South Africa.

Anglo Platinum will sell an effective 51% of Lebowa Platinum and an effective 1% of the Ga-Phasha Project for a total consideration of R3,6-billion to Anooraq. Mvela Resources will purchase Anglo Platinum’s 50% interest in the Booysendal Project and 22,4% direct interest in Northam for a total consideration of R4-billion.

Anglo Platinum was up R46, or 4,72%, to R1020, Impala Platinum perked up R5,91, or 2,71%, to R223,66, but Northam Platinum lost 3,15%, or R1,74, to R53,51.

Anglo Platinum’s decision to sell assets and shares worth R10,5-billion to black-owned companies in the three-way deal fest will establish Northam as an independent, black-owned and the fourth largest PGM producer in South Africa.

James Wellsted, general manager of investor relations at Mvelaphanda Resources, said the company would pay for the stakes using the R1,5-billion in cash it has on hand and R2,5-billion worth of debt.

Mvelaphanda Resources plans to then on-sell the entire 100% in Booysendal to Northam Platinum in return for 125-million shares worth R6,25-billion.

Together with the 22,4% stake it already holds in Northam, Mvelaphanda Resources will then control 63,4% of Northam Platinum, making it the sole controlling shareholder.

In other platinum stocks, Aquarius Platinum rallied R9,50, or 4,31%, to R230.

Gold miner AngloGold Ashanti was unchanged at R289,50, but Harmony was up R1,35, or 2,1%, at R65,75. Earlier it said it has officially signed formal agreements with Pamodzi Gold for the sale to all rights, title and interest of Orkney shafts located near Orkney in the North West.

Supply chain management and automotive company Super Group lifted 3,6%, or 45 cents, to R12,94. It earlier reported a 15% increase in headline earnings per share to 132,3 cents for the 12 months ended June. An unchanged dividend of 30 cents per share was declared.

Resorts group Gold Reef rose 50 cents, or 1,57%, to R32,25. It said earlier that it is recommending an offer submitted by BidCo for a cash consideration of R34 per Gold Reef share. The purchase consideration equates to an enterprise value of approximately R11,4-billion.

In the telecommunications sector, fixed-line operator Telkom eased 84 cents to R190,15, and mobile network operator MTN Group lost 1,77%, or R1,88, to R104,12. On Monday Dow Jones newswires reported that the possibility of Telkom selling its fixed-line business to MTN may have taken some in the market by surprise. But it makes sense if Telkom is going to sell its 50% in Vodacom to Vodafone, according to an analyst.

Among bank stocks, Absa retreated R1,15 to R131,55, but FirstRand was 1,50%, or 35 cents higher, at R23,75 , and Standard Bank added 40 cents to R106,20.

Financial services group FirstRand said it is to seek shareholder approval to unbundle its 57,1% stake in health insurance group Discovery.

Discovery was 1,11%, or 30 cents lower, at R26,70.

The group reported it lifted diluted headline earnings per share by 33% to 168,4 cents for the year ended June. The group’s net profit after tax excluding black economic empowerment totalled R1,1-billion — an increase of 34% — while its operating profit increased 20% to R1,5-billion. The group declared a total dividend for the year of 37 cents. — I-Net Bridge