The JSE continued to advance by noon on Friday as BHP Billiton’s announcement from Thursday flowed through the market.
On Thursday, BHP Billiton admitted to having made a play for rival Rio Tinto, which put to rest days of market speculation over whether BHP Billiton was in fact courting Rio Tinto over a potential tie-up that would create a $300-billion-plus resources colossus.
But the Melbourne-based resources group was rejected by Rio, and BHP said that it has again written to the group with which it intends to continue to seek an opportunity to meet and discuss its proposal.
By noon, the JSE’s all-share index added 0,94% as resources advanced 1,21%. The platinum mining index climbed 0,78% but the gold mining index was off 0,25%.
Financials were 1% firmer, and banks collected 0,82%, while industrials gained 0,56%.
The rand was bid at 6,46 to the US dollar, from 6,48 when the JSE closed on Thursday, while gold was quoted at $835,65 a troy ounce from $838,55/oz at the JSE’s last close.
However, even though the JSE was up almost 300 points, one trader said that he expects to see a sell off later, with BHP Billiton ending flat ahead of the weekend and Wall Street dragging the JSE lower.
He said that investors would be watching how BHP Billiton and Anglo American’s shares perform on London’s stock market, and that some investors were a bit nervous.
“I think we will have a sell off. The Alsi is up almost 300 points and I think it will head flat and move into negative territory. Anglo in London has come off and I think Billiton will end flat — which I think will end flat on the JSE. The guys will watch what Billiton and Anglo do in London,” said Mark Wurr, a local trader from Global Trader.
Wurr added that BHP was looking toppish, and people didn’t know what was going on with the takeover talks and everyone was nervous.
He also said that everyone was getting out of Anglo shorts.
“I think that there are big positions holding the market, and I think if it cracks, it will really crack,” said Wurr.
Wurr added that internationally, people are not holding stocks, and that it has to filter down into stocks on the JSE. He also said that the Dow futures were lower and that he also expects the JSE to come off if Wall Street opens in negative territory.
“You can’t stop the water flowing through the cracks,” said Wurr.
Taking a look at stocks on the JSE, BHP Billiton lifted R3,79, or 1,65%, to R233,39 and Anglo American collected R5,19, or 1,07%, to R489, while petrochemicals group Sasol shot up R10,74, or 3,18%, to R349.
In the gold mining sector, AngloGold Ashanti was 37 cents lower at R306,12 and Harmony dipped R1,71, or 2,25%, to R74,39.
Platinum miner Anglo Platinum added R7,50 to R1 077,50 and Impala Platinum was R2,40 better at R262,40.
Among industrial stocks, diversified industrial group Barloworld was off 40 cents to R131,60, while brewer SABMiller rose R2,88, or 1,52%, to R192,58, and Swiss luxury goods group Richemont strengthened 46 cents, or 1,07%, to R43,33.
However, retailer Spar was R2, or 3,31% lower, at R58,50.
Media stock Naspers gained R3,25, or 1,63%, to R202,25 and Johncom rallied R5,10, or 4,86%, to R110. Johncom’s share was up because the Competition Tribunal had unconditionally approved the merger between Naspers, Electronic Media Network and Supersport International Holdings, according to a trader earlier this morning.
He said that Johncom would now sell its stake in M-Net and Supersport to Naspers in return for Naspers shares, which would then be distributed to Johncom shareholders. The transaction will result in Naspers acquiring all of the issued share capital in M-Net and Supersport.
Insurance group Mutual and Federal lost 40 cents, or 1,47%, to R26,80. On Thursday, Old Mutual confirmed that it might sell its controlling stake in Mutual & Federal to Royal Bafokeng Holdings.
However, Old Mutual perked up 53 cents, or 2,38%, to R22,78.
Banking group Absa added 15 cents to R137,65 and Nedbank inched up 82 cents to R149,92. Standard Bank collected R1,66, or 1,49%, to R113,21. – I-Net Bridge