/ 12 March 2008

JSE advances as banks cheer Fed

Banks and financials helped the JSE advance further by midday on Wednesday as they cheered the move by the United States Federal Reserve to raise liquidity in financial markets.

At noon, the JSE’s broader all-share index had gained 1,35%. Financials collected 1,94%, while banks were up 1,67%. The platinum mining index advanced 1,48%, resources added 1,34%, but the gold mining index pulled back 1,84%. Industrials picked up 1,1%.

The rand was bid at 7,77 to the US dollar from 7,84 when the JSE closed on Tuesday, while gold was quoted at $973,30 a troy ounce from $971,07 at the JSE’s last close. Platinum was last at $2 018/oz, down 1,32%, or $27, from its overnight close of $2 045/oz.

Dow Jones Newswires reported that markets rallied on Tuesday after the Fed said it would expand its securities lending programme to promote liquidity and foster the functioning of financial markets to ease the credit crisis.

The Fed will lend up to $200-billion of Treasury securities to primary dealers secured for a term of 28 days, rather than overnight, as in the existing programme, it added.

”The US had a good day yesterday because of the Fed’s move and that filtered through to international markets,” one Johannesburg-based trader said.

He added that financial stocks on the JSE were at the forefront.

”These shares are pretty much driving the market, and the three resource heavyweights — Anglo American, BHP Billiton and Sasol — which have the biggest

weight in the market, are all up and they have the market going north,” he said.

However, he said that gold stocks were lower because of profit taking after their recent good run and a firmer rand also dampened these counters.

”The rand is currently at 7,77 to the dollar, and we were talking about it hitting R8 the other day. In the last week, there has been a re- firming in the rand — which is hitting gold stocks. Also, it is at that point where the market has decided that they have run up too hard, so they have to pull back because the guys have to take their profits at some stage. So the rand and the huge run last week is why gold stocks are lower today,” he added.

Resource heavyweight Anglo American gained R12,40, or 2,53%, to R502, while BHP Billiton improved R4,25, or 1,77%, to R243,80 and Sasol recovered 90 cents to R408,40.

Gold miner AngloGold Ashanti dipped R5,50, or 1,96%, to R275 and Harmony pulled back R3,18, or 3%, to R102,91.

Platinum producer Anglo Platinum was five cents lower at R1 249,95 and Impala Platinum added R9,09, or 2,85%, to R327,99.

Diversified industrial group Barloworld shot up R4,57, or 4,16%, to R114,50 and brewer SABMiller perked up 30 cents to R171.

Elsewhere, financial counter Investec Limited collected R2,43, or 4,43%, to R57,23 and Investec advanced R2,21, or 4,14%, to R55,61. Standard Bank was up 91 cents to R97,20 and FirstRand was 47 cents, or 2,77% higher, at R17,46.

Life assurer Old Mutual firmed 62 cents, or 3,49%, to R18,40 and Metropolitan strengthened 63 cents, or 4,78%, to R13,80. Metropolitan reported earlier that its diluted core headline earnings per share for the year ended December 31 2007 had improved to 142,27 cents from 112,93 cents. – Reuters