Solid gains in bank stocks pushed the JSE further into the black at midday on Friday, while platinum stocks added some extra light.
At noon on the JSE, the all-share index was 0,62% higher as banks collected 2,01% and financials added 1,08%. The platinum mining index added 1,24% and resources edged up 0,29%, but the gold mining index gave up 1,66%. Industrials picked up 0,82%.
The rand was bid at R6,54 to the dollar from R6,58 when the JSE closed on Thursday, while gold was quoted at $775,30 a troy ounce from $767,30/oz at the JSE’s last close.
Gold continued to flirt with fresh 28-year highs, taking its cue from ongoing strength in the oil price. The precious metal’s price was also supported by the weakening dollar, which again skirted record lows against the euro on growing United States inflation concerns and expectations of a rate cut by the US Federal Reserve next week.
“The bank sector is very high, and the rumour is that since the Standard Bank deal, analysts are rerating the entire sector to value it the way the sector is valued offshore,” said a local equities trader.
He added that Standard Bank’s share price had gone up by about 12% over the past week.
On Thursday, it was announced that the Industrial and Commercial Bank of China
(ICBC) is to acquire a 20% stake in Standard Bank for $5,5-billion — approximately R36,7-billion. The trader said many long-term investors are looking at Standard Bank and getting into the stock again.
The acquisition will be done by means of an interconditional specific issue of new Standard Bank ordinary shares for cash and acquisition of shares from existing ordinary shareholders in terms of a scheme of arrangement.
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.
Standard Bank’s share had advanced R3,60, or 3,12%, to R119 by midday.
Looking at other sectors on the JSE, the trader said that some construction stocks were performing well, adding that there might be a play with the strong rand and that some market players were looking for shares that were not sensitive to the currency.
He added that commodity prices were “brilliant”, but the strong rand was weighing on commodity stocks.
Among resource stocks on the JSE, BHP Billiton added R1,69 to R242,19, while Anglo American lost 82 cents to R426,98 and Sasol improved R2,90 to R325,40.
In the gold mining sector, AngloGold Ashanti fell R4,29, or 1,42%, to R298,20, while Goldfields gave up R3,24, or 2,73%, to R115,26 and Harmony shed 14 cents to R67,35.
Platinum group Impala Platinum gained R5,28, or 2,33%, to R231,78 and Anglo Platinum was R2,40 better at R1 052,40.
In the building and construction sector, Aveng increased R2,01, or 3,09%, to R67, while Raubex Group grew two rand, or 5,56%, to R38 and Wilson Bayly Holmes-Ovcon pocketed R5,85, or 4,64%, to R132.
Industrial brand-management group Barloworld slid R2,48, or 1,97%, to R123,51 and brewer SABMiller shed R1,13 to R189,87.
Barloworld said earlier that it had signed an agreement to sell its Scientific Laboratory Group of businesses to Nova Capital Management, the specialist acquirer of private equity and corporate portfolios, for £75-million — or about R1,01-billion.
New Clicks rallied R1,05, or 6,21%, to R17,95, after Thursday’s results reflected a 45,1% increase in diluted headline earnings per share to 103 cents for the year ended August.
Telecommunications group Telkom edged up 79 cents to R178,79 and MTN Group was up R4,18, or 3,48%, to R124,18.
In the banking and financial sector, Absa lifted R3,40, or 2,59%, to R134,50 and RMB was up 90 cents, or 2,45%, to R37,60. — I-Net Bridge