JSE softer as banks fall on concerns

A weaker bank sector forced a positive JSE to pull back into the red by midday on Friday, leaving the all-share index 0,14% lower at noon.

The JSE’s bank index was down 1,38% at midday as local and international traders questioned whether the move by central banks to inject liquidity into financial markets was enough to help boost economies and settle global credit concerns.

Financials gave up 0,48%, but the gold mining was a slight 0,04% in the red.
Resources were flat (+0,01%), while the platinum mining index improved 0,16%. However, industrials were off 0,08%.

The rand was bid at R6,78 to the dollar, from R6,73 when the JSE closed on Thursday, while gold was quoted at $797,95 a troy ounce from $801,35/oz at the JSE’s last close.

“The United States Federal Reserve Bank’s [Fed] announcement earlier this week that it wanted to unite with world central banks to inject liquidity into financial markets has actually led to the US market losing confidence in the Fed—that it could avert the credit crisis,” said a local trader.

He added that what happens on Wall Street affects the JSE, and investors were selling off bank and financial stocks as they were also concerned about the extent of the subprime issues.

On Thursday, a trader said that players might be thinking that there must be big trouble on Wall Street if the Fed had to unite with major central banks to alleviate credit conditions and help boost global financial markets.

“I see Wall Street’s recovery yesterday as more of a technical bounce, which will turn into a dead-cat bounce as Dow futures are down, indicating a negative Wall Street open,” he added.

At midday on the JSE, bank group Absa fell R1,60, or 1,4%, to R112,40 and Standard Bank dropped R1,85, or 1,75%, to R103,85.

Resource giant Anglo American shed 99 cents to R436,01 but BHP Billiton added R1,25 to R218,50. Sasol was off 98 cents at R327.

Gold miner AngloGold Ashanti lifted R2,63 to R297,93 but Harmony eased 56 cents to R68,44.

Among platinum counters, Anglo Platinum recovered R19, or 1,99%, to R974 but Impala Platinum lost one rand to R229.

Imperial slumped R5,40, or 5,09%, to R100,60 after it said on Thursday that it expects headline earnings per share for the interim period to the end of December to be between 15% and 20% lower than a year ago.

However, brewer SABMiller gained R2,50, or 1,4%, to R180,90.

The share price of Avusa, previously known as Johncom, adjusted R26,50, or 38,02%, to R59,50, from R96, as it was unbundling the Naspers N shares on Friday.

On November 8, the Competition Tribunal unconditionally approved the sale of Johncom’s stakes in M-Net and SuperSport to Naspers. As a result, Johncom could proceed with the implementation of the sale agreement and subsequent unbundling of the Naspers N shares to be received as part consideration for the sale.

Naspers climbed R1,97, or 1,08%, to R184,02.

Insurer Santam was down R25,20, or 19,46%, to R104,30, as it was paying out a special dividend of R22 to shareholders on Friday.—I-Net Bridge

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