/ 14 February 2008

World markets, metals support JSE

Firm world markets and stronger metal prices continued to support the JSE by noon on Thursday.

At noon, the broader all-share index had risen 1,34%. Banks collected 2,33% and financials climbed 1,07%. Industrials advanced 1,44%, the platinum mining index gained 1,4%. Resources were 1,35% higher and the gold mining index added 1,16%.

The rand was bid at 7,64 to the US dollar from 7,67 when the JSE closed on Wednesday, while gold was quoted at $911,13 a troy ounce from $899,33/oz at the JSE’s last close. The platinum price was trading at $2 013/oz, up $35 from its close.

“The JSE was above the 29 000 level today which has mostly been driven by

resources, which has really been the fuel behind this market,” one trader said.

The bourse had hit an intra-day high of 29 141,369 points in the morning session.

He explained that if market players had to look at the resources index, they would see that it was trading close to its peak levels, but if they had to look at the banks and industrials indices, they would see them down well below their all-time highs.

The resources index was at 62 196,520 points, just off its all-time high of

63 730,391 points hit in October last year. However, banks were at 32 698,52 points, down from its all-time high of 42 966,781 points hit in October last year, and financials were also off their high of 25 947,730 hit in May last year, trading at 20 232,750 points at midday.

“This just gives us an indication of where the problems have been. But we are seeing a recovery among financials and industrials. However, it is still early days, and there is still a lot of concern internationally about the state of world economies,” he said.

He said that the JSE was being supported by international markets today, after sharp advances in Asia and a positive close on Wall Street.

Asia’s Hang Seng was up 3,68%, its Nikkei added 4,27%. Wall Street’s DJIA ended 1,45% higher, the Nasdaq rose 2,32% and the S&P500 climbed 1,36%.

The dealer also said that investors were still worried about local growth because of high interest rates and slower consumer spending, and he added that the recent power cuts by Eskom in an effort to reduce capacity on its power stations only “exacerbated” the economy’s position.

On another note, the trader said that investors have seen resource prices hold, which has buoyed the resource market. “China and India continue to grow, and that demands iron ore and coal and the platinum price has been up at record levels because of supply concerns in South Africa,” said the trader.

He also said that the JSE has found a support base at these levels, which was “good news”. “I don’t think the market will run through the 31 000 level any time soon, but it won’t go below 25 000 either,” he said.

Looking at stocks on the JSE, iron ore producer Kumba Iron Ore was R8, or 2,67% higher, at R308. On Thursday it reported record production of 32,4-million tonnes for the year ended in December 2007.

Diluted headline earnings per share grew to 958 cents from 666 cents a year ago. A final cash dividend of 400 cents per share was declared.

Kumba increased revenue 33% to R11,5-billion on the record production, higher sales volumes, increased benchmark prices and quality premia on certain products, it said.

Platinum producer Impala Platinum’s share price collected R6,84, or 2,29%, to R305,84, after it earlier reported record half-year earnings of R4,66-billion as well as a record refined platinum production of 1,03-million ounces for the six months to end December 2007.

Increased production and improved platinum prices helped the company achieve a 10% rise in sales from R14,9-billion in H1 2006 to R16,3-billion in H1 2007.

On the JSE’s resources index, BHP Billiton edged up R1,98 to R234,50, Anglo American added R9, or 1,97%, to R465 and Sasol was R1 in the black at R368.

Gold miner AngloGold Ashanti was up R1 to R266 and Harmony gained R2,20, or 3,05%, to R74,36.

Platinum producer Anglo Platinum improved R12,98, or 1,1%, to R1 195 and Lonmin strengthened R25,18, or 5,2%, to R509,18.

Diversified industrials group Barloworld was R2,26, or 2,54% firmer, at R91,26 and brewer SABMiller shed 20 cents to R165,80.

Banking group Firstrand was up 50 cents, or 2,92%, to R17,60 and Standard Bank lifted R2,16, or 2,37%, to R93,16. – I-Net Bridge