/ 5 March 2008

Profit-taking continues to weigh on JSE

The JSE widened its losses by midday on Wednesday as profit-taking and negative sentiment continued to dampen the market.

By noon, the JSE’s broader all-share index declined 1,4%, led by a 2,72% pull back in the platinum-mining index. The gold-mining index retreated 2,71% and resources dipped 1,85%. Banks gave up 1,92%, financials shed 0,56% and industrials weakened 1,26%.

The rand was bid at 7,83 to the United States dollar from 7,82 when the JSE closed on Tuesday, while gold was quoted at $967,30 a troy ounce from $984/oz at the JSE’s last close.

“It has been a bit rough on the JSE — Dow futures are flat and European markets are positive but the JSE is weak,” said an equities trader.

He explained that resources were down because of profit-taking. “They were just going too high and there was a bubble building among resources, which was being inflated by a weaker US dollar, but if the dollar strengthens it could turn any time,” he said.

Among resources, Anglo American was down R6,49, or 1,23%, to R520,01, BHP Billiton fell R3,57, or 1,41%, to R249,93 and Sasol was off R9,79, or 2,42%, to R394,21.

Anglo Platinum dropped R34,01, or 2,48%, to R1 340 and Impala Platinum pulled back R11,99, or 3,26%, to R356,01.

AngloGold Ashanti eased R2,10 to R289,90 and Gold Fields gave up R4,48, or 3,8%, to R113,52.

Another trader explained that construction stocks were down on bad news that Eskom was going to halt all new construction projects countrywide that are bigger than a residential home — for the next four to six months.

“The news is negative for the country as a whole, and it can impact on South Africa’s GDP growth,” he said.

Building and construction group Aveng lost R1, or 1,72%, to R57 and Murray & Roberts dipped R2,59, or 2,71%, to R92,90.

Brewer SABMiller improved R1,73, or 1,07%, to R164,03.

Among retailers, Pick ‘n Pay slipped R1,05, or 3,5%, to R28,94, Foschini weakened R1,39, or 3,43%, to R39,11 and Lewis tumbled R2,89, or 6,42%, to R42,12.

One trader explained that after FirstRand released its results on Tuesday, and after Standard Bank announced its results on Wednesday, there were a lot of negative comments about the consumer side of their businesses and it could have a dampening effect on their earnings. The outlook for banks is not that bad, but their comments show that their earnings will be negatively affected, he said.

RMB Holdings decreased R1,27, or 4,7%, to R25,75, after it earlier reported that its normalised diluted earnings per share had increased by 13% to 174,4 cents for the six months to December 31 2007.

Standard bank retreated R1,26, or 1,35%, to R91,75 and FirstRand declined 48 cents, or 2,82%, to R16,55.

Standard Bank reported earlier that it had improved its diluted headline earnings per share on a normalised basis by 21% to 947,5 cents for the year ended December 31 2007.

Life assurer Liberty was down R2,22, or 3%, to R71,78 and Liberty Holdings slumped R13,50, or 7,4%, to R168,90.

However, property group Liberty International was up R7,22, or 4,93%, to R153,75 on speculation that someone could be expressing an interest in the company. — I-Net Bridge