/ 12 November 2007

JSE slowly lifts on back of BHP announcement

The JSE started to show a slight turnaround on Monday as a renewed announcement by BHP Billiton added some buying interest among resource stocks. By midday, the JSE's all-share index lifted 0,3% as resources collected 0,79%. However, the gold and platinum mining indices pulled back 0,91% and 1,4% respectively.

The JSE started to show a slight turnaround on Monday as a renewed announcement by BHP Billiton added some buying interest among resource stocks.

Last week, BHP Billiton announced it had made an offer to rival Rio Tinto, and even though it was rejected, said that it would continue to seek an opportunity to meet and discuss its proposal. Earlier on Monday, BHP Billiton briefed investors and analysts on the benefits of a proposed combination with Rio Tinto.

Some of the things it pointed out were that the potential BHP Billiton Rio Tinto merger could create an industry “super major” and that Rio Tinto shareholders were to get 41% of the merged company if the deal had to go through. The merger Ebitda impact could be $3,7-billion.

It also said that the merger could show $2-billion revenue growth and see a cost saving of $1,7-billion. The regulatory approval of the merger may take up to 12 months, but the merged BHP-Rio could be among the world’s top five companies by market capitalisation.

By midday, the JSE’s all-share index lifted 0,3% as resources collected 0,79%. However, the gold and platinum mining indices pulled back 0,91% and 1,4% respectively. Financials advanced 0,41%, banks were off a slight 0,03% and industrials lost 0,37%.

The rand was bid at R6,67 to the dollar, from R6,60 when the JSE closed on Friday, while gold was quoted at $817,35 a troy ounce from $833,05/oz at the JSE’s last close,

“The JSE is up because of BHP Billiton and Anglo American,” said a local trader, adding that the announcement made by BHP Billiton was lifting other resource stocks.

The trader also said that the FTSE was up in the United Kingdom, from which the JSE was taking its cue, even though other world markets were weaker. In the UK, the FTSE 100 was last up 0,72%.

At noon on the JSE, BHP Billiton recovered R4,70, or 2,05%, to R233,80 and Anglo American climbed R6,72, or 1,42%, to R480,61. Sasol added R2,55 to R348,05.

In the gold mining sector, AngloGold Ashanti eased 65 cents to R311,15 and Goldfields gave up R2,20, or 1,75%, to R123,30.

Platinum stock Anglo Platinum retreated R10,80, or 1,04%, to R1 029 and Impala Platinum was R4,50, or 1,81%, lower at R244,50.

First Uranium Corporation was untraded on Monday, from its close of R80. It earlier reported net income of $3,1-million for the three months ended September compared with $0,8-million for the same period a year ago. Net income for the first half was $8,5-million compared with a net loss for the prior fiscal year of $1,5-million.

Civil engineering and construction group Stefanutti & Bressan shed four cents to R26,45. It earlier reported 40,68 cents in diluted headline earnings per share for the six months ended August, from 30,91 cents a year ago. No interim dividend was declared.

Brewer SABMiller was down R1,77 to R188,50, and retailer Lewis lost R1,25, or 2,24%, to R54,50. Lewis said on Monday that its headline earnings per share were up 11% to 308,5 cents for the six months ended September. Its diluted headline earnings per share came in at 307 cents. An interim dividend of 144 cents per share was declared — up 24,1%.

Retailer Pick ‘n Pay was seven cents better at R38,19, after saying earlier that it plans to spend R110-million to change its brand identity and introduce and repackage most of its product lines. It also said that the name “Pick ‘n Pay” will remain unchanged.

Telecommunications stock Telkom dipped R3,02, or 1,68%, to R176,49, after announcing that it expects headline earnings per share to decrease by 14% to 20% for the interim period to September this year. However, MTN Group was up 24 cents to R126,50.

In the banking and financial sector, Absa fell 75 cents to R135,25 and micro-lender African Bank Investments Limited (Abil) was off 13 cents to R35,10. Abil earlier reported headline earnings of R1,334-billion for the year ended September from R1,109-billion for the year before — an increase of 20%.

Abil’s headline earnings per share increased by 20% to 268,4 cents from 223,3 cents. The board declared a final dividend of 130 cents per share, with the total dividend for the year up 13% to 225 cents from 200 cents a year ago.

Nedbank eased 30 cents to R147,20 and Standard Bank inched up 45 cents to R112,40. — I-Net Bridge