The JSE remained firm at midday on Thursday as activity in the banking sector continued to dominate the market.
At noon, the all-share index was up 0,97%, led by a 3,34% climb in the platinum mining index. The gold mining index gained 1,34% and resources rose 0,69%. Banks and financials collected 2,48% and 1,59% respectively, and industrials advanced 1,03%.
The rand was bid at 6,58 to the US dollar from 6,65 when the JSE closed on Wednesday, while gold was quoted at $765,45 a troy ounce from $758,45/oz at
the JSE’s last close.
“Banks are still up because of the Standard Bank rumours and also because of the PPI figure,” said Greg Kangleas, a local equities trader from Cortex.
Earlier the JSE halted trading in Standard Bank shares with immediate effect at the request of the directors, pending the release of the announcement.
Speculation was rife all morning that a Chinese bank was about to take a stake in Standard Bank and that was confirmed when shortly after midday, an
announcement was made that the Industrial and Commercial Bank of China (ICBC) is to acquire a 20% stake.
ICBC is to acquire the stake for $5,5-billion — or around R36,7-billion rand — by means of an inter-conditional specific issue of new Standard Bank ordinary shares for cash and acquisition from existing ordinary shareholders in terms of a scheme of arrangement, each of the post-issue ordinary share capital
of Standard Bank.
Of the R36,7-billion the Chinese bank will be paying for the stake, R20,7-billion will be payable to shareholders and R15,9-billion will be in the form of new proceeds to Standard Bank.
The new ordinary shares will be issued at a 30 trading day volume weighted average price of R104,58 per share, while the consideration for the shares to be acquired in terms of the scheme of arrangement will be R136 per share — a 30% premium.
The JSE then announced that trading in Standard Bank would resume at 1pm.
The trader said that PPI data was in line with market expectations, which was “kind of strange” as CPI figures on Wednesday were worse than expectations.
Data released by Stats SA showed South Africa’s producer price index (PPI) rose by 9,4% year-on-year (y/y) in September, unchanged from August.
PPI was expected to have increased at a slightly higher 9,5% year-on-year (y/y), a survey by I-Net Bridge found. PPI was at 9% y/y a year ago.
Forecasts ranged from 9,3% y/y to 10% y/y, with three of the respondents predicting a dip below last month’s level.
On the JSE at midday, bank stocks were driven by the morning speculation of the Standard Bank deal. Absa was up R5,30 or 4,22%, to R131, while Firstrand lifted R1, or 4,12%, to R25,30 and Nedbank rallied R6,25 or 4,44%, to R147.
Resource group BHP Billiton pulled back R1,69 to R238, while Anglo American was 80 cents better at R424,80 Sasol lifted R5,30, or 1,62%, to R332,30.
Gold miner AngloGold Ashanti added R6,80 or 2,31%, to R301,50 and Goldfields recovered R1,01 to R118,61. Gold Fields reported the halving of its headline earnings per share to 63 cents for the three months to end September from R1,40 a year ago. The group’s revenue grew fractionally from R5,113-billion in the June quarter to R5,119-billion in the September quarter, while net profit was down 19% at R482,8-million.
Among platinum counters, Anglo Platinum was R49 or 4,9% higher, at R1 050 and Impala added R7,40 or 3,29%, to R232,40. Lonmin declined R2,10 to R446,80.
Strikes at Lonmin’s Marikana and Pandora Joint Venture operations in South Africa resulted in a 19% fall in the platinum miner’s production during the three months to end September.
In the industrials sector, brewer SABMiller (SAB) dipped 80 cents to R191,20, but retailer New Clicks recovered 20 cents, or 1,19%, to R16,95. The group earlier reported a 45,1% rise in diluted headline earnings per share to 103 cents for the year ended August from 71 cents a year ago.
Telecommunication stock MTN Group was up 3,09%, 2,65%, to a fresh all time high of R119,60.
Information technology company Datatec edged up 40 cents, or 1,08%, to R37,45. Earlier it reported an 8% rise in headline earnings per share to 16,8 US cents in the six months ended August from 15,6 US cents a year ago. – I-Net Bridge