/ 30 November 2007

Miners, resources add some cheer

The JSE was sharply higher by noon on Friday as gains among mining and resource stocks added some cheer.

At noon, the JSE’s all-share index rose 1,12% as the gold mining index

advanced 2,59%. Resources collected 2,52% and the platinum mining index recovered 1,5%. Banks added 0,65% and financials were up 0,41%, but industrials

shed 0,18%.

The rand was bid at 6,74 to the US dollar from 6,84 when the JSE closed on

Thursday, while gold was quoted at $795,40 a troy ounce from $796,25/oz at the JSE’s last close.

“We are generally having a strong day among world equity markets,” said a local equities trader.

She added that the Morgan Stanley Capital International (MSCI) emerging markets index is being re-weighted later today during the auction.

“The market is anticipating quite a big auction at the end of the day, and it is having an influence on the market,” she said.

She also said that the BHP Billiton and Rio Tinto story is still doing the rounds. BHP Billiton is continuing to bid for Rio Tinto even after Rio rejected the offer, saying that the offer undervalued them and that they were better off alone. Rio Tinto is the third largest resources group in the world after the largest Billiton, and second largest Anglo American.

Earlier this month, there was also market speculation that if BHP Billiton’s bid for Rio fails, the resources giant may make a bid for Anglo American.

“All the potential corporate action is still hovering, and even though the rand is stronger, those two stocks — Anglo and BHP Billiton — have been quite resilient,” she said.

A United States-based analyst said that BHP Billiton’s stock would benefit from Chinese metal demand and from the Chinese energy crisis. “As long as oil and natural gas prices stay high, coal will remain an attractive alternative for fuelling electricity points,” said the analyst. He believes that coal will get “second wind”.

By noon, BHP Billiton gained R3,60, or 1,61%, to R227,50 and Anglo American shot up R20, or 4,66%, to R449.

The trader also said that diversified industrial group Remgro was up quite a bit, as it was going to be one of the biggest stock inflows coming in with the MSCI.

Remgro lifted R4, or 1,7%, to R207, breaking its record. During the morning session, it reached a new time high of R207,50.

Another stock performing well, according to the trader, was Murray & Roberts, which was up almost 4% on the back of a positive trading statement.

It said in a trading statement on Friday that it expected diluted headline earnings per share for its first half and full 2008 financial year to be between 40% and 50% higher than last year. The improved outlook comes follows the securing of a R7-billion, seven-year contract from power utility Eskom.

Among gold counters on the JSE, AngloGold Ashanti rallied R15,05, or 4,72%, to R334 and Harmony gained 91 cents, or 1,26%, to R73,01.

Platinum miner Anglo Platinum recovered R10,07, or 1,06%, to R960,07, while Impala Platinum lifted R4,99, or 2,15%, to R237,49 and Lonmin climbed R14, or 3,19%, to R453.

Brewer SABMiller improved R2,30, or 1,23%, to R189,70, but retailer JD Group fell R2,80, or 4,8%, to R55,55.

Among stocks in the telecommunications sector, Telkom was R1,90, or 1,3% better, at R147,90 but MTN Group pulled back R4,60, or 3,34%, to R133.

MTN has rallied over the past two days, posting strong gains after it discontinued talks with Telkom on Wednesday. In March, Telkom made an announcement that it was reviewing its mobile strategy, and in September, it released a cautionary announcement, which advised shareholders that it had entered into discussions with Vodafone and MTN. The talks had related to certain of Telkom’s assets, which led to speculation that MTN could be interested in buying some of Telkom’s fixed line business.

On Wednesday, MTN’s share collected 7,65% and on Thursday, it rose 6,25%, breaking its all time high and reaching a new all time high of R138. – I-Net Bridge