Anglo, BHP Billiton prop up JSE

Resource heavyweights Anglo American and BHP Billiton — which make up a substantial portion of the JSE — helped the bourse extend its gains by midday on Friday, traders said.

By noon, the JSE’s broader all-share index had lifted 1,21%. Resources collected 1,83%, and the platinum mining index was up 0,8%, but the gold mining index decreased 1,34%. Banks advanced 1,63%, financials rose 1,02% and industrials were 0,44% better.

The rand was bid at 7,82 to the US dollar, unchanged from when the JSE closed on Thursday, while gold was quoted at $906,75 a troy ounce from $904,05/oz at the JSE’s last close.

“Recently we have seen a move out of resources and into financials, but it is very unusual to see the resources and bank stocks travelling in the same direction,” said an equities trader.

He explained that even though bank stocks had been firm over the last few days, most of the action in the market today was coming from the resources index, where Anglo American and BHP Billiton were both up above 3% for the day.

“Anglo and Billiton are making about 80% of the market’s gains right now,” he said.

He said that firmer commodity prices and the rand were helping lift the two heavyweight counters as well as platinum shares. However, he said he was disappointed with the performance of gold mining stocks.

“The gold price is up slightly, and the rand has come off its best levels for the day. Despite this gold stocks are weak and this is very disappointing,” he said.

But other than that, the trader explained that there have been thin volumes traded as nervous investors wait for a cocktail of important events to materialise.

He said that investors could attribute the lack of turnover and the tiny volumes on the JSE to US jobs data that is due to be released later on Friday, the elections in Zimbabwe and the South African Reserve Bank’s Monetary Policy Committee’s (MPC) rate decision next Thursday.

“The data from the US is pretty major, and it is going to give us an indication of how the US economy is doing. This is keeping a lot of players out of the market,” he said.

“Another thing keeping players out of our market is the delay in the results of the Zim election. If they are not released by the end of today , not only will uncertainty prevail, but there will be a greater risk of violent protests,” he said.

On Saturday, Zimbabwe citizens took to the polls to vote for the next president of their country and a new Parliament.

“Also, the MPC meeting — where we will get the next rate decision on Thursday — is keeping a lot of the players on the sidelines. It’s a divided decision among analysts whether rates will go up by 50 basis points or be put on hold,” he said.

He said that even though nervous investors were eying all those factors, the US open later would give the market a bit of direction.

Looking at counters on the JSE, Anglo American collected R15,36, or 3,24%, to R490, BHP Billiton advanced R7,90, or 3,29%, to R248 but Sasol pulled back R1,50 to R376,50.

Among gold counters, AngloGold Ashanti gave up R3, or 1,09%, to R273, Gold Fields lost R1,52, or 1,42%, to R105,23 and Harmony fell R2,13, or 2,27%, to R91,51.

Platinum miner Anglo Platinum gained R14,50, or 1,22%, to R1 199,50, Impala Platinum lifted R1,99 to R336,99 and Lonmin was R8,88, or 1,83% firmer, at R494,28.

On the industrial front, Barloworld was up R4, or 3,57%, to R116 and Bidvest improved R2,60, or 2,23%, to R119.

Brewer SABMiller recovered 22 cents to R172,72 and luxury goods group Richemont was off 41 cents to R44,90.

FirstRand edged up 15 cents to R17, Nedbank firmed R1,50, or 1,24%, to R122,50 and Standard Bank strengthened R2,40, or 2.6%, to R94,65. – I-Net Bridge

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