/ 18 September 2007

All-share recovers as FTSE gains ground

The JSE’s all-share index came out of the morose state it was in earlier, edging up into positive territory by midday on Tuesday driven by the turnaround in the United Kingdom’s FTSE 100.

Shortly before midday, the FTSE 100 was at 6 224,10 points, 0,67% better than Monday’s close as the Bank of England added liquidity to the United Kingdom market, creating relief for some investors.

Dow Jones newswires reported that some of the panic in the UK banking sector seemed to ease on Tuesday after intervention from the UK government and central bank to calm the market appeared to be having some effect.

Some relief also came with lower-than-expected UK inflation data that some analysts said could open the way for an interest rate cut by the end of the year.

Queues at branches of Northern Rock — the mortgage lender at the centre of the storm that was hit by a run on funds after seeking emergency funding from the Bank of England — appeared to moderate on Tuesday morning.

“We have seen a little bit of a bounce on the JSE since being down this morning,” said a local equities trader.

The trader added that the “bounce” came after the Bank of England announced that they added more liquidity into the market of about £8-billion, which helped ease the credit squeeze.

“But, because of that move, our bank and financial stocks are taking a bit of a knock,” concluded the trader.

By 11.58am, the JSE’s all-share index had recovered 0,24%, as the gold and platinum mining indices rose 1,62% and 1,08% respectively. Resources were up 0,85% and industrials were flat (+0,03%). Financials pulled back 0,79% and banks were 1,66% weaker.

The rand was bid at 7,19 to the US dollar from 7,18 when the JSE closed on Monday, while gold was quoted at $718,50 a troy ounce from $716,75 at the JSE’s last close.

In Wall Street, the Dow Jones industrial average shed 0,29% overnight, to 13 403,42 points, while the Nasdaq eased 0,79% to 2 581,66 points and the S&P 500 gave up 0,51% to close at 1 476,65 points.

In eastern markets, the Nikkei lost 2,02% to 15 801,80 points, while the Hang Seng eased 0,09% to 24 576,85 points.

At midday on the JSE, gold mainer Anglogold Ashanti recovered R8,50, or 2,64%, to R330,50 and Gold Fields climbed R1,10 to R120,60.

Platinum stock Anglo Platinum rose R5,20 to R986,50 and Impala Platinum gained R3,70, or 1,78%, to R211,70.

However, Lonmin gave up R25, or 5,29%, to R448.

In the resources sector, Anglo American edged up R2 to R412, BHP Billiton added R2,40, or 1,14%, to R213,40 and Sasol was up R1,01 to R305,80.

Among building and construction stocks, Aveng advanced 2,2%, or R1,16, to R56,30, while Basil Read collected 4,33%, or R1,30, to R31,30, and Cashbuild was unchanged from Monday’s close, trading at R63,90. Earlier, Cashbuild reported that it lifted diluted headline earnings per share by 44% to 528 cents for the year ended June. Diluted earnings per share rose 46% to 536,3 cents. A final dividend of 94 cents was declared — up from 58 cents the same time a year ago. The total dividend for the year amounts to 173 cents — a 49% improvement on the past year’s 116 cents.

Revenue rose 27% to R3,4-billion while operating profit increased 38% to R182,3-million.

Hotel group Sun International recovered R4,50, or 3,09%, to R150.

Telecommunication stocks Telkom and MTN Group added 85 cents and 51 cents to R178,20 and R108,99 respectively.

In the banking sector, Absa lost R2,10, or 1,67%, to R124 and Firstrand shed 3,45%, or 80 cents, to R22,40. Firstrand earlier reported a 29% increase in diluted headline earnings per share to 196.8 cents for the year ended June from 152,6 cents a year ago. A final dividend of 43 cents a share was declared, up from 34 cents a year ago, making a total dividend of 82,5 cents — up 25% from the previous year’s 66 cents. Headline earnings rose 29% to R10,46-billion.

Nedbank gave up R2, or 1,59%, to R124. – I-Net Bridge