/ 1 October 2007

JSE up, but gold stocks tumble

The JSE was up 191 points at midday on Monday, but off its record high it hit earlier as gold stocks tumbled on news that Anglo American was selling half of its stake in AngloGold.

“It is purely commodity stocks that are having a run on this market, having the all-share climb to record highs, and the market seems to like Anglo American because of the news that it is selling half of its stake in AngloGold, but it looks like other gold stocks are in sympathy with AngloGold,” said a local equities trader.

Anglo American said earlier on Monday that it intends to offer for sale 61-million ordinary shares of AngloGold Ashanti in the form of ordinary shares and American Depository Shares (ADSs).

Anglo said in a statement that it expects the offering to represent a major step in the completion of its stated objectives for its stake in AngloGold Ashanti. Anglo representatives remaining on the AngloGold Ashanti board of directors intend to resign from AngloGold Ashanti’s board of directors once Anglo American’s shareholding falls below 20% of the outstanding ordinary shares.

Anglo American expects that its residual position in AngloGold Ashanti will be investment accounted upon the completion of this offering.

Anglo said it has advised AngloGold Ashanti that it currently supports its general strategy to enhance long-term shareholder value. Anglo American’s residual position in AngloGold Ashanti will be subject to a lock-up agreement with the joint bookrunners until 31 May 2008.

Goldman Sachs International is acting as the global coordinator for the offering and Goldman Sachs International and UBS Investment Bank are joint bookrunners for the offering.

By noon on the JSE, the all-share index had collected 0,64% as the platinum mining index climbed 1,76% after earlier hitting a fresh all-time high of 30 257,340 points. Resources, which also hit a new high of 61 036,602 points, advanced 1,16% but the gold mining index tumbled 3,34%. Industrials rose 0,51%, but banks and financials dipped 0,22% and 0,24% respectively.

The rand was bid at 6,87 to the US dollar, from 6,89 when the JSE closed on Friday, while gold was quoted at $745,60 a troy ounce from $744,20/oz at the JSE’s last close.

Taking a look at stocks on the JSE at noon, resource stock Anglo American climbed R9,80, or 2,14%, to R467,30 but gold miner Anglogold Ashanti tumbled 6,81%, or R22,20, to R304.

Among other gold miners, Goldfields dropped R1,94, or 1,56%, to R122,21 and Harmony shed 1,12%, or 91 cents, to R80,68.

Resource stock BHP Billiton added R3,39, or 1,39%, to R247, and Sasol collected R3,98, or 1,34%, to R299,98.

In the platinum mining sector, Anglo Platinum rallied R44,40, or 4,26%, to R1 087, while Impala Platinum edged up 50 cents to R240,50 and Lonmin rose R11,71, or 2,32%, to R516,21.

Banking group Absa weakened R2,40, or 1,12%, to R123,60, while FirstRand lost 14 cents to R21,96 and Standard Bank recovered 48 cents to R99,94.

In the industrial sector, Barloworld added 2,08%, or R2,70, to R132,30, and brewer SAB Miller lifted R1,06 to R194,31.

Retailer Shoprite soared 6,75%, or R2,43, to R38,43, but Spar fell 2,72%, or R1,50, to R53,61. – I-Net Bridge