JSE rallies on bargain-hunting

The JSE extended its gains by noon on Wednesday to push up firmly after resources stocks rallied on traders looking for bargains after the market’s recent falls.

The JSE all-share index had added 2,76%, led by resources gaining 4,28% and platinum miners edging up 0,17%. However, gold stocks eased 0,97%.

Banks gained 2,78%, financials were up 2,18% and industrials firmed 1,35%.

The rand was last bid at R10,05 to the dollar, from R10,12 when the JSE closed on Tuesday. Gold was quoted at $902,87/oz a troy ounce from $909,65/oz at the JSE’s last close, and platinum was at $970,50/oz from its previous close of $960,50/oz.

“We are up on moving in line with international markets,” an equities trader said.

“Resources are holding us up firmly and banks are recovering from their very oversold levels. The banks are eyeing tomorrow’s interest rates decision and the market is hoping for a 100 basis point cut.”

“There is bargain-hunting after the market was recently oversold.”

“Hopefully the market will be able to maintain its current strength going into tomorrow’s session,” she added.

Dow Jones Newswires reports that the FTSE 100 extended gains following better-than-expected UK services PMI data, coming in at 42,5 versus a forecast of 40.

“However these are still very weak levels by historical standards,” said James Knightley, an economist at ING.

“The data points to further significant increases in unemployment,” which then leads to a decrease in prices and demand, he added. The expectation is that the BOE will cut interest rates by 50bp to 1% on Thursday.”

US stocks are expected to open modestly lower, as uncertainty continues to take a toll on investors who are in need of further clarity on the economy and the proposed stimulus packages, said Martin Slaney, a trader at GFT Global Markets.

He called the DJIA to open down 37 points and the S&P 500 down two points.

On the JSE, resources giant Anglo American rose R13,88, or 7,72%, to R193,65 and BHP Billiton added R12,10, or 7,34%, to R177,06.

The miner reported earlier that it had increased its earnings per share by 3% to 110,1 US cents in the half year ended December 31 2008 compared with the same period a year ago. It improved earnings before interest, tax, depreciations and amortisation by 25% to $13,9-billion.

The company called this performance robust given the prevailing poor market conditions, and said it was committed to invest through the cycle.

The company said that in the long term, it expects continued strong growth in demand for commodities from China and other emerging economies.

“We continue to expect that long-run commodity prices will be driven by their long-run marginal cost of supply. Reductions in current capital spending across the industry may constrain industry supply when demand growth recovers,” explained the company.

Petrochemicals group Sasol was up R6,50, or 2,50%, to R267.

Paper group Sappi lost 85 cents, or 2,96%, to R27,90 but Mondi added 77 cents, or 2,53%, to R31,15.

Highveld Steel added R3,39, or 6,78%, to R53,38 and Kumba Iron Ore was up R3,51, or 2,40%, to R149,51.

Gold miner AngloGold Ashanti lost R1,45 to R274,55, Gold Fields shed R1,36, or 1,24%, to R108,30 and Harmony was down R2,29, or 1,92%, to R116,72.

Platinum miner Anglo Platinum eased R3,01 to R392,99 but Lonmin jumped R12,80, or 10,22%, to R138,01.

In diversified miners, Exxaro collected R1,19, or 1,83%, to R66,19.

Elsewhere on the JSE, brewer SABMiller added R6,56, or 4,06%, to R168,22, Bidvest gained R1,20, or 1,23%, to R98,40 and Barloworld collected 48 cents, or 1,47%, to R33,23.

Imperial firmed 50 cents to R54,10.

Imperial Logistics, a member of the Imperial Holdings Group earlier announced that it had achieved a Level Four Broad-Based Black Economic Empowerment rating from Nera Verification Agency in December 2008.

The company also qualifies as a value-adding supplier with an enhanced Procurement Recognition Level of 125%.

Among banks, Standard Bank was up R3, or 4,29%, to R73, Nedbank firmed R1,79, or 1,95%, to R93,54, Absa added R1,18, or 1,25%, to R95,68 and FirstRand firmed 30 cents, or 2,11%, to R14,55.

It was announced that Fitch Ratings had assigned Nedbank Limited’s $2-billion medium-term note programme ratings of long-term “BBB+” for senior unsecured debt, long-term “BBB” for subordinated debt and short-term “F2” for senior short-term debt.

Fitch emphasised that the above ratings are for the general programme; it cannot be assumed that each individual issue under the programme carries the applicable programme rating.

Financial services group Old Mutual put on 43 cents, or 5,66%, to R8,03 and Sanlam gained 12 cents to R16,42.

Media group Naspers added R6, or 3,86%, to R161,50.

Among retailers, Truworths added 38 cents, or 1,06%, to R36,20, Pick n Pay was up 50 cents, or 1,55%, to R32,75 and Foschini gained 51 cents, or 1,11%, to R46,51.

However, JD Group lost R1,42, or 3,87%, to R35,28.

Nu Clicks was flat, up nine cents to R15,89. The retailer reported earlier that it had cancelled and de-listed 21,5 million ordinary shares, but that this would have no financial impact on headline earnings per share.

It explained that these shares were bought back as part of a general repurchase by a subsidiary company in terms of the general authority to repurchase shares approved by shareholders at the annual general meetings held in January 2007 and 2008.

Electronics specialist Reunert gave up 60 cents, or 1,38%, to R42,90. The company earlier reported that it was expecting normalised headline earnings per share for the half year to March 31 to be between 10% and 25% lower than the corresponding period.

It also advised shareholders that earnings per share and headline earnings per share are anticipated to be between 10% and 30% lower than the corresponding reporting period of the previous year.

Construction group Aveng firmed 59 cents, or 2,43%, to R24,84, Murray & Roberts gained 80 cents, or 1,95%, to R41,80 and WBHO was up R2,20, or 2,42%, to R93.

Property loan stock company ApexHi was unchanged at R13,60. Earlier it announced that its combined distributions for the six months ended December 2008 had increased by 11%.

Distributions per A and B unit were unchanged at 67,5 cents and 82,5 cents respectively, but distributions per C unit were up 189% to 24,7 cents from 8,5 cents the previous year. The group said that disposals were at R5,6-million, down from the R46,5-million recorded for the previous year.

Cement manufacturer PPC Cement added 59 cents, or 2,04%, to R29,49.

Telecommunications group MTN lost R1,52, or 1,54%, to R97,28 but Telkom gained R1,38, or 1,23%, to R113,46.—I-Net Bridge

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