/ 10 June 2013

Stocks up as weak rand lifts mining shares

Gold and silver prices took a hit on Tuesday.
Gold and silver prices took a hit on Tuesday.

Kagiso Media was the biggest gainer on the All-share index, jumping 10.53% to R22.99, after the company said it received an "indicative proposal" that may impact its share price. It did not give further details.

The benchmark Top-40 index rose 0.39% to close at 36 485.77, while the broader All-share index climbed 0.3% to 40 933.88.

"It's a rand story," said Helen Masson, chief executive at Pan-African Asset Management. "As the day progressed and the rand weakened, the gold index turned around from negative territory to positive. That was the biggest change today in terms of the rand impact."

The rand weakened as much as 2.7% on Monday on fears of more mine labour strife. The currency is down more than 20% against the greenback since the start of the year.

Sibanye Gold, AngloGold Ashanti and Gold Fields are some of the gold producers that benefited from a soft rand. The weaker currency boosts mining firms as they pay most costs in rand and sell products in dollars.

Stronger balance sheets
Sibanye, which gets all its production from South Africa, was up 10.15% at R10.09 and AngloGold gained 2.23% to R173.75.

Gold Fields rose 1.95% to R62.75. Platinum producer Impala Platinum added 2.06% to R103.50.

Johannesburg-listed shares of companies that reap the bulk of their revenue outside of South Africa in currencies such as the dollar and euro also jumped because the weaker rand makes their balance sheets look stronger.

British American Tobacco rose 2.17% to R557.89, while Swiss luxury goods company Richemont added 1.35% to R91.35.

Over 198-million shares were traded, according to preliminary bourse data. Advancers lagged decliners 147 to 162. – Reuters