Metals give JSE firm underpin

South African stocks extended gains by midday on Friday, moving in line with strong global markets as rallying metal counters continued to give an underpin.

The JSE all-share index had gained 2,35%, with resources firming 3,92%, platinum miners jumping 5,25% and gold stocks adding 2,14%.

Banks were up 1,80%, financials strengthened 1,61% and industrials collected 0,84%.

The rand was last bid at R9,87 to the dollar, from R9,98 when the JSE closed on Thursday. Gold was quoted at $912,60/oz a troy ounce from $919,35/oz at the JSE’s last close, and platinum was at $984,50/oz from its previous close of $975,50/oz.

“This is just a follow-through from strong Asian markets, and there is also renewed interest in the resource sector,” a local trader said.

“There is increased buying and more people are taking long positions,” another trader said.

“Banking stocks are holding strongly, coming from very oversold levels. Investors are starting to pile into this sector.”

“The Baltic Dry Index [showing the cost of booking cargoes of raw materials] is shooting up and these metals are looking good. This is a good sign that things are starting to flow again,” he added.

The traders said that the market was likely to remain around these levels until the US jobless data in the US.

“The outcome of the announcement will give more solid direction,” they added.

Dow Jones Newswires reports that European shares advanced on Friday with luxury plays like LVMH Group climbing on the back of earnings and sales updates, as investors also await the first key update on the US jobs market this year.

On Friday, the US Labour Department will report on its non-farm payroll estimate for January.

Economists surveyed by MarketWatch are forecasting a seasonally adjusted loss of 525 000 jobs, nearly identical to the 524 000 lost in December.

“A number of 500 000 to 600 000 should not spark a major reaction in global markets today. Considering the amount of bad news already priced in, we suspect it may take a number outside the aforementioned range or a spike in the unemployment rate to trigger new risk aversion flows,” said Kenneth Broux, an economist at Lloyds Corporates & Markets.

US stocks are expected to open lower, as Thursday’s cheers over the Treasury’s announcement that it will detail the new rescue plan on Monday are now fading, said Martin Slaney, trader at GFT Global Markets.

He called the DJIA to open down 43 points and the S&P 500 down four points.

Back in Johannesburg, Anglo American gained R7,66, or 3,90%, to R204,07 and BHP Billiton firmed R6,77, or 3,76%, to R187,02.

Petrochemicals group Sasol was up R14,75, or 5,67% to R274,75.

Highveld Steel jumped R5,45, or 10,57%, to R57 and Kumba Iron Ore firmed R8, or 4,94%, to R170.

Among gold miners, AngloGold Ashanti put on R10,45, or 4,11%, to R264,51 and Gold Fields was up R2,07, or 1,99%, to R106,17.

Harmony eased 60 cents to R114.

Harmony earlier reported an 8% decline in gold production to 363 343 ounces in the December quarter from 395 035 ounces in September.

Higher gold prices, particularly the rand gold price, translated into a 17% increase in revenue from R2,7-billion in the three months to end September to R3,1-billion in the December quarter.

Headline earnings per share were significantly higher at 108 cents versus the previous quarter’s 8 cents a share, while basic earnings were 31% lower at 81 cents for the December quarter compared with 118 cents in the September quarter.

The miner also said that it aimed to be debt-free by June this year. Harmony CEO Graham Briggs said the company would then consider returning cash to its shareholders through dividend payments.

“Dividends will be on the agenda once we are debt-free,” Briggs said during a presentation of the company’s December quarter and first half results. “The cash burn in Harmony has stopped and we are putting cash back in the bank,” said Briggs.

DRDGold was down 52 cents, or 6,48%, to R7,50. The miner earlier reported a 30% increase in headline earnings per share to 13,6 cents in the December quarter from 10,5 cents in the quarter before.

Production fell 15% to 60 057 ounces in the December quarter from 70 861 ounces the prior quarter, but this was offset by an 18% increase in the average gold price received to R255 213 per kilogram and a 2% decrease in cash operating costs to R406,9-million in the quarter.

Net profit swung from an R8,8-million loss in the September quarter to a profit of R33,4-million in the December quarter, while operating profit grew 65% to R94,3-million.

Platinum miner Anglo Platinum jumped R17,01, or 4,22%, to R420, Impala Platinum firmed R7, or 6,03%, to R123 and Lonmin gained R2,44, or 1,70%, to R145,94.

In diversified miners, African Rainbow collected R1,48, or 1,23%, to R121,48 and Exxaro was up R2,40, or 3,56%, to R69,85.

Among industrials, brewer SABMiller edged up 18 cents to R165,68, Remgro added R1,90, or 2,68%, to R72,75 and Bidvest put on R1,37, or 1,40%, to R99,38.

Banker Standard Bank was up R1,78, or 2,48%, to R73,50, Absa added R1,75, or 1,86%, to R95,75 and FirstRand strengthened 24 cents, or 1,69%, to R14,47.

Financial services group Old Mutual was up 44 cents, or 5,36%, to R8,65 but Santam gave up R4,99, or 5,87%, to R80,01.

Short-term insurer Mutual and Federal was down 20 cents, or 1,52%, to R13. It earlier reported that it had recorded a full year to December 2008 headline loss per share of 41 cents as opposed to the 287 cents of earnings in the year earlier period.

While the full year dividend remains unchanged from a year ago at 180 cents, the company said it is not declaring a final dividend.

Net 1 UEPS Technologies Incorporated was unchanged at R134. Earlier it reported that its second quarter basic earnings per share had lifted 36% to 49 US cents compared with the year earlier period.

Sugar group Illovo put on 56 cents, or 2,32%, to R24,67 and Tongaat-Hulett was up R1, or 1,49%, to R68.

Tongaat said earlier that it expected its headline earnings per share for the year to December 31 2008 to improve to 566 cents per share from 58 cents in 2007. It sees profit from operations for the year increasing by 35% to R1,132-billion from R838-million before.

Media group Naspers added R4,47, or 2,93%, to R157,02 but Caxton lost R1,39, or 10,74%, to R11,55.

Retailer Woolies put on 41 cents, or 3,09%, to R13,66. It earlier announced the launch of a second new clothing range designed by Country Road. Trenery—an exclusive range of clothing—will be available in selected stores from August this year, Woolworths said.

Furniture retailer JD Group gained 93 cents, or 2,69%, to R35,45 and Foschini added R1,09, or 2,37%, to R47,04.

Construction group Aveng firmed R1,04, or 4,14%, to R26,16, and Group Five was up 74 cents, or 2,58%, to R29,45.

Cement manufacturer Pretoria Portland Cement put on 88 cents, or 3,05%, to R29,73.

Liberty International put on R2, or 3,92%, to R53,03.

Among telecommunications groups, MTN Group firmed R1,16, or 1,23%, to R95,21 but Telkom was off R2,05, or 1,80%, to R111,82.—I-Net Bridge

Client Media Releases

ITWeb, VMware second CISO survey under way
Doctoral study on leveraging the green economy
NWU's LLB degree receives full accreditation
Trusts must register as home builders