South African stocks remained firm at midday on Wednesday as merger talks surrounding BHP Billiton kept heavyweight miners buoyant, but easing metal prices weighed on other mining counters.
At noon, the JSE’s broader all-share index was up 0,88% at 32 280,27. It earlier set a new record of 32 460,35, thanks to a 1,39% gain in resources.
But the gold and platinum mining indices were down 0,57% and 0,79% respectively.
Banks were up 0,54%, financials inched up 0,17% and industrials were 0,43% in the black.
The rand was bid at 7,67 to the US dollar from 7,57 when the JSE closed on Tuesday, while gold was quoted at $862,85 a troy ounce from $867,15/oz at the JSE’s last close.
”The market is once again riding on the back of commodity stocks. The story around BHP Billiton is spilling over to Anglo American” one trader said.
BHP Billiton is gaining from speculation that Chinese state-owned company Chinalco was considering raising its stake in the Melbourne-based resource giant.
BHP Billiton, which earlier said it expected compound annual growth rate to be 6,9% on copper equivalent volume basis, is further rumoured to have be lining up cash to sweeten its offer for Rio Tinto.
BHP is offering 3,4 of its own shares for each Rio Tinto share, which values Rio at around $175-billion.
Shares in BHP Billiton rallied more than more 4% in early trade on Wednesday to set a new record of R315. It was last trading 2,82%, or R8,50 higher at R309,50.
Moving in sympathy, rival Anglo American was up 3,13%, or R15,52, to R511.
Pressured by easing gold price as the dollar strengthens, AngloGold Ashanti was down 75 cents to R294,75, Harmony shed 57 cents to R95,42 and Gold Fields lost R1,01 to R103,30.
Platinum producer Anglo Platinum was R10,15 better at R1 260,15, but Impala Platinum weakened 1,69%, or R5,60, to R326,40.
Elsewhere, banks rebounded despite Tuesday’s hawkish comments by the Reserve Bank governor Tinto Mboweni.
Standard Bank was 31 cents better at R88,21, Nedbank was up 2,28%, or R2,51, to R112,51, and FirstRand inched up 10 cents to R15,65, but Absa dipped 81 cents to R92,19.
”Banks are very cheap at the moment. They are at levels last seen in 2002 and the share prices have already reflected a 50 basis point rate hike in June,” one trader said.
Financial services group Liberty Group was down 26 cents to R71,79. It said earlier that despite tough trading conditions, its return on embedded value for the first three months of 2008 remains in line with market guidance of 14,5% to 15,5%.
Meanwhile, investors digested a raft of corporate earnings released on Wednesday morning.
Steel maker ArcelorMittal SA edged up 50 cents to R238,50. It earlier reported that headline earnings per share of 449 cents for the quarter ended March from 343 cents in the March 2007 quarter and 344 cents for the December 2007 quarter.
Grocer and liquor retailer Spar was up 2,40%, or R1,35, to R57,55. It earlier reported diluted headline earnings per share of 192,2 cents for the six months ended March 2008 from 149,6 cents s year ago.
IT group Datatec rallied 5,36%, or R1,50, to R29,50 after reporting a 21% rise in annual underlying earnings per share to 47,3 cents.
Rival Dimension Data climbed 3,05%, or 23 cents to R7,77 after reporting that interim diluted earnings rose to 3,4 US cents from two cents a year ago.
Electronics firm Reunert eased 10 cents to R55,55. It earlier reported diluted headline earnings per share of 294 cents for the six months ended March 2008 after a 64,1 cents loss a year ago. – I-Net Bridge