JSE ends up on housing data
June 2, 2009
By Gareth Vorster
The JSE rallied in afternoon trade on Tuesday, ending higher on the back of positive housing data from the US.
By 5pm, the JSE all share index had advanced 0.48% to close above 23,661, with resources down a fraction (0.02%). Platinum counters lost 0.17%, but gold miners improved 1.18%.
Banks shed 0.60% with financials down 0.53%, but industrials gained 1.56%.
The rand was last bid at R8.02/$ from R7.94/$ when the JSE closed on Monday.
Gold was quoted at $980.75/oz from $976.38/oz at the JSE's last close, and platinum was at $1,218.50/oz, from $1,220/oz at its previous close.
A local trader said: "Positive data in the US regarding pending home sales has turned the market this afternoon. The market had opened weaker amid scepticism and profit taking.
"The industrial index is trading well, led by companies including SAB and others who list abroad, because of a slightly weaker rand. On the whole, the market is currently very strong," the trader said.
Dow Jones Newswires reports that US stocks built on a feverish rally that drove major averages to key milestones for 2009 after a report showed a jump in pending home sales.
The Dow Jones Industrial Average, which soared 221 points on Monday, recently added 47 points, or 0.5%, to trade at 8768.
The Nasdaq Composite Index was up 0.5%. The S&P 500 also climbed 0.2%, trading at 944.69.
It was hemmed in by a 1.5% drop in its financial sector. But gains in healthcare and consumer staples helped to keep the index on an even keel.
The National Association of Realtors said pending sales of existing homes in April rose 6.7% - the biggest monthly jump in eight years.
The data built on a flurry of other recent reports suggesting that the housing market and the broader economy are stabilising.
Coming into Tuesday's action, the Dow was less than 55 points from break-even for the year, and the S&P was up 4.4% for the year to date following a round of buying sparked by optimism about manufacturing activity around the world.
Professional traders and money managers are growing optimistic that the market's momentum can feed on itself for a few more weeks, at least.
A consensus is emerging on trading floors that there is little standing in the way of a run by the S&P to 1000 in the near term, though the index may turn volatile as investors reckon with the lingering effects of the long-running global recession.
Financial stocks trailed the broader market as blue-chip firms announced plans to raise fresh capital to bolster their balance sheets.
American Express sank 3% and JP Morgan Chase fell 2.2% after both companies surprised investors by announcing plans to sell stock.
Regulators said large banks must first prove they can raise money from private investors before exiting the Troubled Asset Relief Programme.
Morgan Stanley was down 2.2% after it said is planning a US$2.2 billion stock offering.
Elsewhere, US shares of Barclays fell 12% after Abu Dhabi's International Petroleum Investment Co said it was selling 1.3 billion shares.
Commodities prices were flat after Monday's gains. Front-month oil futures were hovering within sight of US$68 a barrel.
The dollar weakened against the euro and Japanese yen. The US Dollar Index was off 0.5%.
International stocks were generally split along regional lines.
In Asia, the Nikkei 225 rose 0.3%, while the pan-Europe Dow Jones Stoxx 600 slipped 0.3%.
On the JSE, Anglo American gave up 50 cents to R249 after an 8.86% gain yesterday, but BHP Billiton added 71 cents to R205.71.
Petrochemicals group Sasol gave up R4.65, or 1.51%, to R302.35.
Gold miner AngloGold Ashanti profited R3.95, or 1.18%, to R338, with Harmony adding 65 cents to R96, and Gold Fields up R1.60, or 1.50%, to R108.60.
Platinum miner Anglo Platinum advanced R1.54 to R589.04, but Impala Platinum slid R1.01 to R198.99.
Lonmin gained R6.10, or 3.04%, to R206.50.
In diversified miners, African Rainbow added R1.16 to R142.80, but Exxaro declined R2.50, or 2.92%, to R83 and Kumba Iron Ore lost R6.50, or 3.16%, to R199.50.
Steel maker ArcelorMittal was down R1.01, to R101.99.
The group earlier launched a R30 million preferential procurement initiative aimed at stimulating sustainable development in the communities in which it operates.
"The initiative will run for three years and will ensure that the company's operations and activities contribute towards the long-term development of the surrounding communities," ArcelorMittal said in a statement.
Among industrials on the JSE, British American Tobacco nudged up 45 cents, to R222.93, with brewer SABMiller adding R6.27, or 3.77%, to R172.38.
AECI climbed R1.75, or 3.78%, to R48, but Tiger Brands gave up R3.34, or 2.31%, to R141.50. Barloworldclimbed R1.11, or 2.80%, to R40.78.
Banking group Standard Bank picked up 64 cents to R86, while Nedbank gave up R3, or 3.23%, to R90. Absa lost 20 cents to R102.
Among retailers, Foschini picked up R1.10, or 2.20% to R51, with JD Group up R1.25, or 3.27%, to R39.45, and Lewis claimed R2.40, or 5.33%, to 4R7.40.
Massmart profited R1.75, or 2.18% to R82.20.
Astral moved R2.90, or 2.99%, to R99.80, but construction group M&R Holdings shed R1.48, or 2.88%, higher to R49.82.
Pharmaceutical company Adcock Ingram was relatively unmoved, losing 15 cents to 43.50.
Earlier the group reported diluted headline earnings per share of 203.7 cents for the six months ended March 2009 from 169.9 cents a year ago.
The company declared a maiden dividend of 70 cents per share.
Revenue rose to R1.956 billion from R1.619 billion a year ago, while turnover was 23% higher at R1.897 billion on the back of strong volume growth from the antiretroviral tender awarded in the second half of the previous financial year, and reasonable volume growth in the Hospital segment.
Net profit was 20% better at R358.98 million.
Pricing accounted for less than 5% of the increase in turnover, primarily from the 6.5% Single Exit Price increase granted in May 2008.
Turnover grew despite the loss of a significant agency in The Scientific Group in late 2008, which contributed R27 million to revenue in the prior period, loss of tenders to the value of R22 million in the Hospital segment and the conversion of certain ephedrine containing over-the-counter brands to prescription-only products in April 2008, which led to a decrease of R16 million in revenue when compared to the first half of the prior year.
Adcock also said that it is withdrawing its firm intention to acquire Cipla Medpro South Africa.
The company said CMSA has failed to give its views on the merits of the proposed transaction, despite its public undertakings to do so and has instead placed the stated opposition of its principal supplier, Cipla India, at the forefront and has attempted to discourage Adcock from proceeding with the proposed transaction.
Telecommunications group Vodacom gained 40 cents to R54.05, MTN added R3.51, or 2.93%, to R123.51 and Telkom was up 50 cents, or 1.34%, to R37.70.
Earlier Telkom announced the successful completion of the accelerated bookbuilding of Vodacom shares, raising R1.54 billion for "ineligible shareholders".
Telkom placed of 28.993 million shares of Vodacom on behalf of "ineligible shareholders", with institutional investors through an accelerated bookbuild offering.
The Vodacom shares were placed at a price of R53 per share.
As set out in the circular to Telkom shareholders dated 2 March 2009, the directors of Telkom, in consultation with Vodafone, determined that Telkom US shareholders would be regarded as "ineligible shareholders" for the unbundling of Vodacom shares to shareholders of Telkom completed on 25 May 2009 and would therefore not receive Vodacom shares in such distribution.
The proceeds from the offering, net of applicable fees, expenses, taxes and charges, will be distributed to the "ineligible shareholders" in proportion to their entitlement to Vodacom shares, Telkom said.
Publisher Naspers declined R3, or 1.52%, to R194.10. - I-Net Bridge
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