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Weak rand ignites SA bourse
September 21, 2006
Index heavyweight mining giant Anglo American pushed shares higher on Thursday amid rumours of buying interest from Chinese investors, while a weaker rand and futures close-out also ignited the bourse.
"The main themes today were the futures close-out, which saw volumes hit R19-billion ($2.56 billion), and the rand falling," Ryan Wibberley, a trader at Investec Securities, said.
"Anglo was pushed by buying ahead of the close-out, a weak rand and the rumours of Chinese buying shares."
Speculation was rife that a major Chinese industrial group had been around the market attempting to buy 3 percent of Anglo or around 40 million shares.
Anglo ended up 3.04 percent to 308.61 rand, while rival BHP Billiton gained 0.75 percent to 129.16 rand.
The miners' strength was also in response to firmer base metal prices, another trader said.
The Top-40 index of blue-chip stocks gained 1.31 percent to 20 007.54 points while the All-share index added 1.2 percent to 21,886.40 points.
South Africa's rand slid 1.4 percent to a three-month low as markets digested data showing the country's current account deficit remained near a 24-year peak in the second quarter.
Traders said there was also mounting concern over the possibility that former deputy president Jacob Zuma may become the country's next leader, after a judge threw out corruption charges against him on Wednesday.
Investec , which has a rand-hedge and is listed in London, starred on the day with a 4.44 percent jump to R72.38. Its 1.5 percent gain on the London bourse was magnified by the weaker rand, a trader said.
Anglo Platinum rose 3.95 percent to 763 rand as most miners gained on the futures close-out and weaker rand. A weaker currency boosts exporters' sales as they earn higher returns in local currency when exchanging foreign proceeds.
Short-term insurer Santam tumbled after Sanlam said talks over taking full control of Santam had been called off. Santam shares fell 12.5 percent - its biggest one-day percentage fall since 1998 - after the announcement.
Santam shares closed 11.87 percent to 74.03 rand, against a 0.45 rise in the midcap index .
Shares in Sanlam were 2.16 percent higher at 16.47 rand.
"Clearly they couldn't reach agreement on a price. Sanlam was not going to over-pay and seems certain shareholders in Santam were quite aggressive on the pricing of their shares," a Cape Town-based insurance sector analyst said.
Cement producer Pretoria Portland Cement (PPC) lagged the blue chips a day after it warned that spending on expansions would hurt dividends.
PPC majority owned by industrial group Barloworld , was the biggest loser among blue chips for the second straight day, sliding 4.15 percent to 357.43 rand.
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