JSE gallops to a new record
January 27, 2006
South Africa's stocks galloped to a new record on Friday, strengthened by a 10 percent rise in Mittal SA , after its parent Mittal Steel bid for its biggest rival in a market shake-up.
Gold and platinum shares were also strong, with AngloGold Ashanti and Impala Platinum (Implats) also at record highs after surging on high precious metal prices.
Diversified miners Anglo American and rival BHP Billiton also came to the party, hitting fresh highs as copper and aluminium prices rocketed to new highs.
Mittal SA starred on the day, adding 9.66 percent to 71.50 rand, after Mittal Steel launched an unsolicited 18.6 billion euro ($22.66 billion) offer for rival Arcelor .
Mittal SA's rise mirrored that of steel stocks globally, as analysts said Mittal Steel's plan would go a long way to addressing the fragmented steel industry's perennial problem of struggling to rein in capacity during an economic downturn. Steel shares across the world rallied on hopes of more deals.
"The bid was very bullish for steel stocks worldwide, it sent Mittal SA up the top of the pops," Warren Hammond, a trader at Andisa Securities said.
The JSE Top-40 index of blue chips added 1.74 percent to 17,867.08 points, while the All-share index rose 1.57 percent to 19,718.47 points - both at new peaks.
Gold stocks kept their recent upbeat tempo, with AngloGold up 5.38 percent to 371 rand. Rivals Harmony and Gold Fields ended 4.73 and 3.29 percent up at 106 and 136.50 rand higher respectively, also fresh highs for the shares.
The gold sector index rose by a solid 4.11 percent.
Implats and Angloplat added 5.03 and 2.15 percent to 104.50 and 475 rand respectively, tracking the high metal price.
Anglo gained 4.11 percent to 236.28 rand, while oil-price sensitive BHP Billiton rose 1.29 percent to 115 rand.
Petrochemicals group Sasol was 2.28 percent up at 246.50 rand as crude oil headed back above $67 a barrel due to worries over supplies from Iran and Nigeria.
"The rand's weakening also helped pull the market higher," Investec Asset Management's Kevin de Villiers said.
Traders expect the local currency to move in a band of 6.08-6.13/dollar ahead of the central bank's verdict on domestic interest rates next week. Retail and bank stocks also saw healthy gains, with strong interest from overseas investors. Furniture maker Steinhoff was up 4.02 percent at a fresh high of 2.70, Woolworths added 2.95 percent to 16.05 rand, also a new record.
The bank sector was mixed, with Standard Bank adding the most, up 2.4 percent to 82.77 rand.
"There's been a lot of interest for retailers from overseas, the shares are seen as cheap, while for banks the moves have been wishy-washy head of the rates decision," De Villiers said. - Reuters
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