Profit taking saps strength from JSE
May 14, 2009
By Palesa Motloung
Johannesburg - Stocks remained in the red by noon on Thursday as investors took profits after US retail sales sparked a sell-off in international markets.
By noon, the JSE all share index had lost 1.16 percent, with resources down 2.08 percent. Platinum counters gave up 1.28 percent and gold miners were off 3.77 percent. Banks slipped 1.81 percent, financials weakened 1.07 percent, and industrials eased 0.13 percent.
The rand was last bid at R8.54 to the dollar from R8.48 when the JSE closed on Wednesday. Gold was quoted at $923.08 per ounce from $926.85 at the JSE's last close, and platinum was at $1 106 per ounce, from $1 097 at its previous close.
"We are still weak on the markets. There is a sell off after the US retail sales yesterday," a trader said. "There is profit taking in the market. At the moment the indices are eyeing the initial jobless claims in the US and are hoping to get direction from there.
"In the short term, the trend is downwards, markets are in a consolidatory phase. Gold stocks are down sharply, they ran so hard earlier this week and now everyone is taking profits. The gold price has also retreated as the dollar strengthened overnight.
"The rand is weak and it is cushioning our market. If it wasn't for the rand we would have been fallen much more," he said.
Dow Jones Newswires reported that the FTSE 100 was flat attempting to push forward but lacking direction to make any meaningful headway, traders said. The battle between momentum of optimism and consolidation continues, with the markets trading between gains and losses in a directionless session, said Joshua Raymond, strategist at City Index.
"We have started to see investors picking up financials and mining stocks at their lowest, having fallen more than 12 percent during the week," said Raymond. Eyes turn to US April PPI at 12.30 GMT for further direction. The FTSE 100 was last flat, up 0.07 percent.
US stocks are expected to open modestly higher, bouncing back from Wednesday's sell-off, said Martin Slaney, trader at GFT. He called the Dow Jones Industrial Average to open up 23 points and the S&P 500 up 1 point.
"The current trend remains to the upside ... with hopes that Wal-Mart's earnings will provide the silver lining to the retail sector story," he said. Jobless claims and PPI data are due at 12.30 GMT.
Back in Johannesburg, Anglo American was down R3.51, or 1.85 percent, to R186.49 and BHP Billiton weakened R1.25 to R178.75. Sasol fell R11.90, or 4.08 percent, to R280.10.
Paper group Sappi lost 86 cents, or 3.49 percent, to R23.78 but rival Mondi was up R1.14, or 4.06 percent, to R29.25. ArcelorMittal declined R2.50, or 2.82 percent, to R86.
AngloGold Ashanti shed R9.19, or 2.88 percent, to R310.22, Gold Fields gave up R4.77, or 4.43 percent, to R102.93 and Harmony lost R4.82, or 5.18 percent to R88.18.
Anglo Platinum was off R2.98 to R474.02, Impala Platinum was down R2.82, or 1.70 percent, to R163.18 and Lonmin fell R3.09, or 2.05 percent, to R147.91.
Diversified miner African Rainbow was down R3.59, or 2.85 percent, to R122.51 and Exxaro gave up R1.80, or 2.47 percent, to R71, but Hulamin was up 24 cents, or 2.28 percent, to R10.75.
Elsewhere on the JSE, brewer SABMiller eased 30 cents to R158. The group earlier reported a 4 percent decline in adjusted headline earnings per share to US 137.5 cents for the year ended March 2009 from 143.1 cents a year ago.
In UK currency EPS were up 4 percent to 79.7 pence, while in South African rands, EPS were up 19 percent to 1,218.6c SA cents. The Board has recommended a final dividend of 42.0 US cents per share, which will be paid to shareholders on 28 August 2009. This brings the total dividend to 58.0 US cents, unchanged from the prior year.
Group revenue was up 6 percent at $25.3 billion and profit before tax was down 9 percent at $2.958 billion. Lager volumes were up 2 percent to 210 million hectolitres, with organic lager volumes level with the prior year despite weakened consumer demand. Organic soft drinks volumes were up 5 percent. The group reported organic, constant currency group revenue growth of 9 percent, benefiting from strong pricing.
Barloworld lost R1, or 2.67 percent, to R36.50, Tiger Brands was down R2.37, or 1.82 percent, to R127.88, British American Tobacco shed R2.81, or 1.26 percent, to R221 and Imperial declined 70 cents, or 1.33 percent, to R51.90.
Standard Bank was down R1.95, or 2.42 percent, to R78.55, Nedbank lost R1.73, or 2.01 percent, to R84.27 and FirstRand weakened 23 cents, or 1.77 percent, to R12.77. Old Mutual was up 15 cents, or 1.80 percent, to R8.50 but Sanlam lost 18 cents, or 1.05 percent, to R16.92.
Sugar group Illovo weakened 79 cents, or 2.97 percent, to R25.81. Media group Naspers added R3.07, or 1.61 percent, to R193.40 while Kagiso Media was off 15 cents, or 1.23 percent, to R12.
Truworths was down 50 cents, or 1.45 percent, to R34.06, Pick n Pay lost 90 cents, or 2.81 percent, to R31.15, JD Group shed R1.03, or 2.97 percent, to R33.62 and Foschini gave up R1.18, or 2.58 percent, to R44.62.
Construction Aveng gave up 38 cents, or 1.29 percent, to R29.12, Murray & Roberts lost 77 cents, or 1.70 percent, to R44.52 and WBHO fell R2.49, or 2.42 percent, to R100.21.
ICT group Datatec added 10 cents to R15.30. It earlier reported underlying earnings per share of 33.1 US cents for the year ended February 2009 from 47.3 US cents a year ago.
Revenue rose to $4.2 billion from $4 billion in 2008, while earnings before interest, tax, depreciation and amortisation (Ebitda) declined to $126 million from $151 million. Cash generated from operations rose to $195 million from 2008's $77 million.
The capital distribution per share of 12 US cents was unchanged from 2008. The group said its scale and diversity continues to mitigate the impact of the current economic climate and the group has shown relative resilience in a tough market.
Approximately 50 percent of Ebitda has been derived from integration, services and consulting, it noted. A highlight was the strong performance from Logicalis in all regions with the division reporting Ebitda up 57 percent to $57 million.
MTN Group eased 28 cents to R107.22 but Telkom was up R1.27, or 1.14 percent, to R112.27.
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