/ 13 May 2008

JSE stays weak on miners, world markets

South African stocks remained weak at midday on Tuesday with miners the worst causalities on easing metal prices, while falling overseas markets added to selling pressures.

At 12.09pm, the JSE’s broader all-share index was down 0,86%, weighed by a 2,88% drop in platinum miners. Resources fell 1,36% and the gold mining index was off 1,59%.

Banks edged down 0,10%, financials gave up 0,51% and industrials were down 0,29%.

The rand was bid at 7,63 to the US dollar from 7,61 when the JSE closed on Monday, while gold was quoted at $876,85 a troy ounce from $886,05/oz at the JSE’s last close.

“We saw Sasol breaking records yesterday on the back of firmer oil prices, but the rally seems to have ended for the oil price and that has a negative effect on the gold price,” one trader said.

The trader added that rising oil prices raised fears of global inflation, and spurred buying for gold, which is used as a hedge for inflation.

“Sasol and mining stocks are driven by the same interrelated factors now, both on the upside and downside,” the trader said.

Sasol, the maker of motor fuels from coal, was down 1,44%, or R6,95, to R475,65. Brent Crude futures fell below the $124 per barrel level to hover around $122 on Tuesday. Sasol earlier said annual headline earnings per share would rise by as much as 60% on the back of the weaker rand and rising crude oil prices.

On the resource index, Anglo American was down 1,11%, or R5,60, to R497,10 and BHP Billiton was off 80 cents at R297.

Among gold counters, AngloGold Ashanti fell 3,86%, or R12, to R298,50 and Gold Fields was off 17 cents to R104,09. Official data showed earlier gold output in South Africa fell 10,9% year-on-year in March.

Platinum producer Anglo Platinum (AMS) shed 2,04%, or R26, to R1 247. The world’s largest platinum producer on Tuesday said it had appointed AngloGold Ashanti’s chief operating officer Neville Nicolau to head its operations. The announcement comes ten months after the company’s former CEO Ralph Havenstein quit in July last year.

Impala Platinum slumped 3,46%, or R11,85, to R330,65. Platinum was last trading 1,41% lower at $2 063/oz.

Among banks, Standard Bank slipped 67 cents to R88,13 but Absa added 1,21%, or R1,10, to R92.

MTN Group was down 31 cents to R158,69 on running news that it was a takeover target. The Financial Times reported on Tuesday that Middle East-based telecoms firm Etisalat is interested in MTN, raising prospects of a bidding war for the local telecoms firm after India’s Bharti Airtel was said to be lining up cash to buy a stake in the company.

Also in the news, packaging group Astrapak was unchanged at R7,25. It earlier reported a 35,1% decline in headline earnings per share to 69 cents for the year ended February from 106,3 cents a year ago.

Fund manger Coronation Fund Managers was flat at to R5,99. It earlier reported a 23% decline in diluted headline earnings per share to 24 cents for the six months ended March from 31,1 cents a year. Basic HEPS declined to 26,6 cents from 34,7 cents before. – I-Net Bridge