Resources keep JSE afloat
October 23, 2009
By Palesa Motloung
The JSE ended 70 points higher on Friday, kept afloat by resources counters which benefited from the weaker local currency, an equities trader said.
At 17:00 the JSE all share index had collected 0.26%, with resources up 0.69% and platinum producers adding 0.72%, but gold miners were down 0.36%.
Banks lost 1.19% and financials weakened 0.49%, but industrials edged up 0.18%.
At 16:45, the rand was bid at 7.45 to the dollar from 7.47 just before the JSE closed on Thursday. Gold was quoted at US$1,060.05 a troy ounce from US$1,056.42/oz just before the JSE's last close, and platinum was at US$1,370.50/oz, from US$1,362.50/oz at its previous close.
"We had quite a mixed day today, but we managed to end up. Gold stocks are lower and so are the banks. The rand has weakened and it's supporting the resources. Banks are down on the weak rand," the trader said.
"We are holding up quite well. The US markets are also mixed. Microsoft is up and that is why the Nasdaq is up. Sentiment is still positive.
There has been a lot of volatility, and that goes with some uncertainty. The momentum is still very strong. Here and there are stocks that are overbought.
"Earnings are coming out quite well and that is supporting the market," she said.
Dow Jones Newswires reports that most US stocks pushed lower on Friday as a drop in oil prices weighed on energy shares and investors paused after a day of heavy buying on Thursday.
Even as a morning report showed demand for previously owned homes surged in September, stocks pushed to new lows of the session.
The Dow Jones Industrial Average recently slid 29 points, or 0.3%, to 10051, while the Standard & Poor's 500 fell 3 points to 1090.
Stocks had opened higher as another round of quarterly reports came in better than expectations, namely from technology bellwethers Amazon.com and Microsoft. For the third straight week, quarterly reports have propelled solid stock market gains, including a more than 100-point gain in the Dow on Thursday.
Yet, even though corporations appear to be wading through the economic landscape at least better than analysts had expected, that the S&P 500 is up more than 60% in the past seven months is giving some pause.
"With the run up this week that we've had in some single names, profit taking is natural," said John Brady, senior vice-president with MF Global.
"Investors are still just getting more comfortable with risk. There really hasn't been an allocation out of Treasuries into equities just yet."
On Thursday, Travelers, 3M and McDonald's pushed stocks higher and sent the Dow back above the psychologically important 10,000 level, with all three firms now pushing stocks lower early on Friday.
In addition, a drop in oil prices of nearly $1 to near $80 a barrel weighed on energy companies.
Counteracting any morning weakness, technology stocks continued to rally, with the tech-heavy Nasdaq Composite up 12 to 2177.
Microsoft added to a view that recovery may be taking hold across the technology sector, beating expectations for its fiscal first-quarter earnings even as profit declined 18% from last year.
Microsoft surged 8% to $28.69 in early trading. At the time the JSE closed, the DJIA had weakened 0.57%.
Back in Johannesburg, Anglo American plc (AGL) was up 7.32 rand, or 2.58%, to 291.50 rand and BHP Billiton (BIL) collected 72 cents to 223.85 rand.
Petrochemicals group Sasol (SOL) lost 2.86 rand to 309.80 rand.
ArcelorMittal (ACL) was off 2.99 rand, or 2.58%, to 113 rand.
Gold miner AngloGold Ashanti (ANG) was off 1.50 rand to 325 rand and Harmony (HAR) weakened 75 cents to 83 rand, but Gold Fields (GFI) edged up 20 cents to 106.70 rand.
Platinum miner Anglo Platinum (AMS) added 5.01 rand to 673 rand, Impala Platinum (IMP) rose 1.27 rand to 175 rand and Lonmin (LON) was up 1.85 rand to 210.85 rand.
In diversified miners, African Rainbow (ARI) added 6.37 rand, or 4.10%, to 161.90 rand.
Among industrials on the JSE, brewer SABMiller (SAB) collected 27 cents to 202.22 rand, Barloworld (BAW) was up 50 cents, or 1.04%, to 48.50 rand and Imperial (IPL) gained 1.40 rand, or 1.68%, to 84.60 rand, but British American Tobacco (BTI) was down 1.51 rand to 242.95 rand.
Banking group Standard Bank (SBK) was down 2.14 rand, or 2.10%, to 99.85
rand and Absa (ASA) weakened 1.30 rand, or 1%, to 128.70 rand.
Financial services group Old Mutual (OML) edged up 14 cents, or 1.03%,
to 13.73 rand, but Sanlam (SLM) declined 36 cents, or 1.65%, to 21.44 rand.
Among retailers, Pick n Pay (PIK) was up 97 cents, or 2.46%, to 40.46
rand, Shoprite (SHP) added 84 cents, or 1.33%, to 64.20 rand, Mr Price (MPC)
gained 50 cents, or 1.42%, to 35.60 rand and Clicks (CLS) gained 1.55 rand,
or 6.54%, to 25.25 rand.
Construction group Basil Read (BSR) put on 25 cents, or 1.49%, to 17 rand.
Aveng (AEG) weakened 31 cents to 41.55 rand. It earlier pointed to the South African public sector environment as being affected by delays in contract awards, however it added that its two-year order book was up a fraction to 31.3 billion rand.
In a announcement from the group's chairman, Angus Band, Aveng said: "In spite of tough trading conditions, the Aveng Group is managing its current portfolio to generate and extract value for shareholders through its focus on margin improvement and growth in areas where market opportunities exist.
"In the South African environment, the market is still being affected by
delays in contract awards, particularly in the public sector."
Telecommunications group MTN Group (MTN) lost 1.19 rand to 124.71 rand,
Telkom (TKG) was up 83 cents, or 1.84%, to 45.83 rand and Vodacom (VOD)
firmed 1.40 rand, or 2.61%, to 55 rand.
Mobile operators MTN and Vodacom earlier confirmed an agreement to lower
termination rates by about 19%.
"MTN SA can confirm that an agreement has been reached with Vodacom, and
is pursuing bilateral negotiations with Cell C and other operators," the
mobile player said.
According to MTN, the two parties reached an agreement based on the parameters set in earlier negotiations, which had been under way for some time.
"However, it is with regret that no agreement has been reached with Cell C at this stage," MTN said.
The bilateral negotiations took place in terms of the regulations by the Independent Communications Authority of South Africa (Icasa), which had oversight over the process, the group added.
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