Strong metal prices help JSE
October 12, 2005
Johannesburg - South Africa's stocks tip-toed higher on Wednesday, buoyed by the world's top two platinum producers, Anglo American
Platinum and Impala Platinum on the back of strong metal prices.
The price of platinum hovered below a 25-1/2-year peak as funds snapped up the metal. The same funds pushed the gold price to its highest level since early 1988, which lifted South African gold stocks such as Harmony and Gold Fields .
South Africa is the world's top producer of the two metals.
"There was a negative underlying sentiment in the market, if it wasn't for the platinum and gold stocks, the market would have struggled even more," Abrie du Plessis, chief investment officer at Gryphon Asset Management said.
He said the rest of the Johannesburg market was muted as it tracked weaker European bourses, which were lower on renewed concern over the scope of US monetary tightening.
Investors were also cautious a day ahead of a decision of domestic interest rates. The central bank's monetary policy committee started its regular two-day meeting on Wednesday.
It is seen keeping the repo rate steady at 7 percent, but Governor Tito Mboweni is expected to warn of the impact of steep oil prices on rising inflation, which may fan fears of interest rate hikes next year and support the rand. The decision is expected after 1300 GMT.
"What Mboweni will say between the lines and the impact of those comments on future rates is what the market is waiting for, there was a bit of uncertainty," Du Plessis said.
Implats starred on the day, rising 5.48 percent to 731 rand, while
Angloplat added 5.44 percent to 371.15 rand.
Harmony and rival Gold Fields rose 1.23 percent and 1.16 to 73.54 and 95.60 rand respectively, but AngloGold Ashanti
lost 0.73 percent to 283.90 rand.
Old Mutual added 2.35 percent to 15.70 rand after saying it was sure it will reach its goal of 90 percent acceptance from Swedish savings group Skandia owners for its $6 billion bid, but would still be able to make cost cuts and get other synergies at a lower of level of ownership.
The top 40 index closed 0.17 percent up at 14,829.25 points, while the all share index finished 0.18 percent stronger at 16,332.45 points. Petrochemicals giant Sasol bucked the upward trend despite a jump to above $64 per barel in oil price, as investors took profits, as a cross-section of shares also weakened.
Traders said the rising oil price had also dampened sentiment on the
buorse, with investors worried about the impact of rising oil prices on consumption and corporate margins.
"The rising oil price is a concern over inflationary pressure," Ferdi
Heyneke, a portfolio manager at Afrifocus Securities said.
"What we saw today was a rotation, from mostly retailers, banks and
industrials to mining, especially platinum and gold."
Sappi fell hardest by 2.89 percent to 65.50 rand, while brewing giant SABMiller fell 2.45 percent to 119.45 rand on weaker US sales at US business Miller. - Reuters
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