/ 6 May 2008

JSE higher led by miners

South African stocks remained higher at noon on Tuesday, supported by miners on stronger metal prices, but shaky overseas markets and stronger rand limited the upside move, traders said.

Local mobile phone firm MTN Group remained the most heavily traded stock by value after it confirmed that it was in share price-sensitive talks with an Indian firm.

At noon, the JSE’s broader all-share index was up 0,96%, with the gold and platinum mining indices up 3,29% and 2,13% respectively. Resources were 1,30% in the black.

Banks were down 1,08%, financials fell 0,72% but industrials added 1,17%.

The rand was bid at 7,52 to the US dollar from 7,56 when the JSE closed on Monday, while gold was quoted at $878,83 a troy ounce from $867,13/oz at the JSE’s last close.

Traders said the market pulled back from the highs due to faltering overseas markets and a stronger rand, which hurts export-oriented counters.

“Gold is right up there, oil remains strong. That is giving a bit of boost to our mining stocks,” one trader said.

In reaction, AngloGold Ashanti, whose rights offer announcement and poor quarterly results this morning did not sit well with investors, rallied 5,82%, or R15,30, to R278,30.

“The dollar price of gold is looking very attractive at the moment,” said Ferdi Heyneke, a trader at Afrifocus Securities.

AngloGold Ashanti earlier reported a widening of its quarterly loss from R10,99 in the December quarter to R13,76 in the March quarter.

The company recorded a gross loss of R3,4-billion for the three months to end in March, which represents a 30% widening of the gross loss of R2,4-billion reported for the three months to end December 2007.

In a separate statement, AngloGold Ashanti said that it would proceed with an approximate one-for-four renounceable rights offer, which would result in it issuing approximately 69,4-million ordinary shares at a minimum share price of R172.

Gold Fields recovered 1%, or R1, to R100,70, after two days of sideways movement following last weekend’s tragic accidents at South Deep mine.

Analysts said South Deep, which was closed for safety inspections and investigations, was not critical to Gold Fields’ fortune.

Harmony Gold climbed 2,96%, or R2,64, to R91,94.

On the resource index, Anglo American edged up R2,06 to R511,56 and BHP Billiton added R2,03 to R283,53.

Synthetic fuels maker Sasol was up 2,75%, or R12,15, at R454,15 as the oil price continues to trade near record highs.

Elsewhere, mobile phone operator MTN Group was the blue chip’s top gainer after it confirmed late on Monday that it was in price-sensitive talks with India’s Bharti Airtel.

Shares in MTN rallied nearly 10% in early deals to set a new record intraday high of R165, but pulled back at midday to trade 5,99%, or R8,98, higher at R158,98.

“MTN is engaged in discussions with Bharti Airtel Limited which, if successfully concluded, may have a material effect on the price of the company’s securities. The discussions are exploratory in nature and may or may not lead to any transaction,” the company said in statement posted on the JSE’s news service on Monday evening.

Telkom, the fixed phone line operator, rose 2,71%, or R3,46, to R131,01.

Paper maker Sappi was up 4,15%, or R4,36, to R109,36. It earlier reported basic earnings per share of US 68 cents for the quarter ended March, up from 18 cents in the December quarter and compared with 25 cents in the March 2007 quarter. This brought basic EPS for the half year to US 86 cents from 38 cents a year ago.

Also in the news, electronics firm Altron jumped 3,04%, or R1,14, to R38,59 after annual diluted headline earnings rose 33% to R327 per share. – I-Net Bridge