/ 21 August 2008

JSE follows global markets weaker

South African stocks remained weaker at midday on Thursday, following the trend on global markets as banks and financials once again took centre stage.

By 11.57am the all-share index was down 1,15%. Industrials were off 1,59%, financials shed 1,19% and banking stocks lost 1,64%.

Resources shed 0,82%, gold miners were off 0,88% and the platinum mining index eased 1,8%.

The rand was bid at 7,73 to the US dollar from 7,75 when the JSE closed on Wednesday, while gold was quoted at $820,22 a troy ounce from $809,05/oz at the JSE’s last close.

Earlier weakness in banks and financials in line with global markets continued in the course of the morning session.

“It’s the Freddie and Fannie story again,” said a local equities trader.

He said the two fell sharply yesterday and that has fed through to global markets, and it is also why JSE banking stocks are down today.

He added that the resources sector was not looking too bad. The relatively firm rand was partially offset by firmer commodities prices.

Gold was up almost $7/oz and platinum rose $25,50/oz from their respective overnight levels.

Dow Jones Newswires reports US stock futures pointed to a weaker start on Thursday as nervousness crept back into the market after a one-day reprieve, with oil prices back on the upswing and more downgrades to earnings estimates for top brokerages.

S&P 500 futures fell 5,6 points to 1 268,20 and Nasdaq 100 futures fell 9,25 points to 1 906,75. Dow industrial futures fell 42

US stocks ended higher on Wednesday, helped by a positive outlook from Hewlett-Packard despite renewed stock-price drops for government-sponsored mortgage buyers Fannie Mae and Freddie Mac. The Dow industrials rose 68 points.

However, global markets have lost ground on Thursday, with the Nikkei 225 falling 0,8% in Tokyo and the FTSE 100 falling 0,7% in London.

On the JSE, resource giant Anglo American was off R2,25 at R402 and BHP Billiton shed R2,01 to R234,99.

Synthetic fuels maker Sasol retreated R2 to R401.

Gold miner AngloGold Ashanti was R3,79, or 1,8%, weaker at R203,22 and Gold Fields was off 36 cents at R66,89. However Harmony bucked the trend, climbing 51 cents to R61,36.

DRDGold advanced 16 cents, or 3,76%, to R4,41. Earlier it reported a significant turnaround in its fortunes with its adjusted headline earnings from continuing operations up some 1,608% from 3,8 cents to 64,9 cents for the 12 months to end June 2008.

The company’s FY08 profit surged to R154,4-million from R3,1-million.

Among platinum miners Anglo Platinum was down R27, or 3,04%, to R861 and Impala Platinum eased R2,97, or 1,38%, at R212,

Among industrials, brewer SABMiller was off R3,10, or 1,9%, at R159,30 and Richemont shed R1,34, or 3%, to R43,05.

Banking group Standard Bank shed R1,15, or 1,37%, to R82,70 and Nedbank was off R1,38, or 1,35%, to R101,02. However, Absa was up R1,10, or 1,08%, to R103,10.

Old Mutual was down 39 cents, or 2,82%, to R13,45.

Among retailers, Woolies was off 40 cents, or 3,43%, at R11,25. Earlier it reported a decline in diluted headline earnings per share to R112,9 cents for the six months ended June 2008 compared with 125,5 cents a year ago.

A final dividend of 49,5 cents was declared, which together with the interim dividend brings total distributions for the period to 79 cents, up 3,9% compared with the same period a year ago.

Massmart was up 45 cents to R78,86. Earlier it reported a 14% rise in headline earnings per share to 663 cents for the 53 weeks period to June 29 compared with the 52-week period a year ago.

A final dividend of 163 cents was declared — up from 123 cents a year ago and bringing the total distribution for the year to 386 cents per share.

Construction and engineering company Aveng was up 41 cents at R61,66. Earlier it said it expects its headline earnings and earnings per share for the year ended June 2008 to be between 65% and 75% higher than the same period last year. – I-Net Bridge