Commodity rally sees JSE end higher
November 23, 2009
By Gareth Vorster
Strong commodity counters and a firm opening on Wall Street saw the JSE end 494 points higher on Monday in what an equities trader said was offshore buying pushing the local bourse higher.
At 5pm the JSE all share index was 1.84% higher, with resources adding 2.64%, gold producers firming 2.59% and platinum miners up 3.47%. Banks gained 1.29%, financials collected 1.09% and industrials moved 1.31% higher.
The rand was bid at R7.47/$ from R7.55/$ when the JSE closed on Friday. Gold was quoted at $1 170.60/oz from $1 140.75 at the JSE's last close, and platinum was at $1 472/oz, from $1 433/oz at its previous close.
"We ended firmly higher today, we had a very, very good day," the trader said.
"The US opened positively and that pushed our market higher. It's more on offshore buying, especially in the resource sector.
"The weak dollar is supporting the commodity prices. Offshore investors are playing into our market and that is pushing the bourse firmer," he said.
Dow Jones Newswire reported US stocks rose early on Monday, as gains in commodities boosted the energy and materials sectors, and the dollar fell after a Federal Reserve member said the US should continue buying mortgage-backed securities past the first quarter of 2010.
The Dow Jones Industrial Average was up 133 points, or 1.3%, to 10455 in early trading. All 30 Dow components are up. Its materials and energy components had the biggest percentage gains, with Chevron up 2.2%, Alcoa up 2.1% and Exxon Mobil climbing 1.4%.
The technology-heavy Nasdaq Composite climbed 1.2%. The Standard & Poor's 500 also rose 1.2%, led by its energy and materials sectors as crude oil futures climbed above $79 a barrel and metals futures rose, with gold moving to $1,165.80 an ounce after reaching a record of $1,171.
Meanwhile, the dollar fell against both the euro and the yen, helping push the US Dollar Index - which represents the dollar against a basket of six other currencies - down 0.9% recently. That marks a reversal of the trends from late last week, when stocks fell as investors shied from riskier parts of the market.
The action came after Federal Reserve Bank of St Louis President James Bullard said on Sunday that the US should continue buying mortgage-backed securities past the first quarter of 2010, when asset purchases are due to end. That helped offset worries from Friday, when the eurozone central bank announced its first step in making it tougher for commercial banks to get loans.
"People are worried about what happens to housing once all the government help falls away, so [the Bullard comments] are certainly part of the mix giving a lift this morning," said Bill Stone, chief investment strategist at PNC Wealth Management.
At the time the JSE closed, the Dow Jones Industrial Average had gained 1.38%.
Back in Johannesburg, Anglo American Plc gained R9.25, or 2.93%, to R324.75 and BHP Billiton moved R5.48, or 2.41% higher, to R233. Petrochemicals group Sasol was up R6.19, or 2.12%, to R298.19.
Paper group Sappi rose 70 cents, or 2.19%, to R32.70. Kumba Iron Ore put on R4.87, or 1.90%, to R261.50.
AngloGold Ashanti picked up R11.75, or 3.57%, to R340.75, Gold Fields added R1.60, or 1.46%, to R111 and Harmony gathered R1.70, or 2.15% to R80.70. Anglo Platinum jumped R31.13, or 4.40%, to R174.50, Impala Platinum was R5.03, or 2.97%, stronger at R174.50 and Lonmin swelled R10.75, or 5.11%, to R221.
Among industrials on the JSE, SABMiller added R4.50, or 2.09%, to R220, Barloworld was up 86 cents, or 1.75%, to R49.90 and Imperial rose R1.35, or 1.68%, to R81.90.
Standard Bank was up R1.50, or 1.57%, to R96.95 and Absa rose R1.95, or 1.57%, to R126. Abil gained 81 cents, or 2.76%, to R30.16.
Microlender African Bank Investments Limited on Monday reported an 11% decline in headline earnings per share for the year ended September 2009 to 225.2 cents from 252.1 cents per share a year ago.
Abil declared a final dividend of 100 cents per ordinary share, bringing the total dividend for the year to 185 cents, a decline of 12% over the previous year's 210 cents per share. Headline earnings of R1.8 billion were flat compared to 2008.
The company said that faced with a deteriorating local economy and volatile capital markets, the group's risk mitigation strategies were tested to the full.
Sugar group Illovo put on 50 cents, or 1.61%, to R31.50 and Tongaat Hulett was R1.71, or 1.81%, higher at R96.20. Media group Caxton declined 40 cents, or 2.54%, to R15.35, while Naspers picked up R12.75, or 4.56%, to R292.25 and Avusa gained 24 cents, or 1.50%, to R16.25.
Retailer Woolies collected 44 cents, or 2.59%, to R17.44, Lewis picked up R2.64, or 5.29%, to R52.50, JD Group rose R2.04, or 4.67%, to R45.70 and Clicks gained R1.26, or 5.01%, to R26.42.
MTN Group gave up 37 cents to R119.40 and Telkom weakened 45 cents, or 1.14%, to R39.15, but Vodacom added R1.20, or 2.09%, to R58.50.
Telkom earlier reported interim headline earnings per share down 37.9% to 242 cents for the six months ended September 30. The groups said basic earnings per share declined 141.2% to 150.2 cents. Operating revenue was up 4% to R18.7 billion.
Interconnect revenue was up 52.5% to R1.46 billion. Operating revenue from the Telkom South Africa segment increased by 2.9% to R17.026 billion, from R16.554 million earlier, primarily due to higher interconnection revenue, growth in data revenues, an increase in revenue from subscriptions and connections and subscription based calling plans, partially offset by lower traffic revenue, the group said.
Total dividends paid out during the reporting period were R11.2 billion. Healthcare group Netcare collected 25 cents, or 2.08%, to R12.25. It earlier reported headline earnings per share of 78.2 cents for the year ended September 2009, up 27.2% from the previous year's 61.5 cents.
Diluted HEPS rose to 77.5 cents from 60.5 cents before. The group delivered strong results in the year under review reflecting continued healthcare demand and the defensive nature of healthcare despite the global economic downturn.
Group revenue rose 6.9% to R23.232 billion, supported by higher demand for private healthcare services in South Africa. The UK showed solid growth and benefited from the inclusion of newly acquired hospitals and the inclusion of Nuffield hospitals for the full 12 months.
The group declared a final capital reduction of 22 cents, making a total capital reduction for the year of 38.0 cents compared with 32.0 cents a year ago.
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