Metals market draws out buyers
July 22, 2008
By Tiisetso Motsoeneng
Johannesburg - The JSE was slightly higher in early trade on Tuesday, boosted by miners on strong metal prices, but continued profit taking in banks and financials restricted the upside move, traders said.
By 9.24am, the all share index was 0.20 percent firmer, with resources advancing 1.52 percent. The gold and platinum mining indices added 1.83 percent and 1.96 percent respectively. However, banks were down 1.87 percent, financials gave up 1.92 percent and industrials weakened 0.61 percent.
The rand was bid at R7.55 to the dollar unchanged from when the JSE closed on Monday, while gold was quoted at $972.40 per ounce from $963.85 at the JSE's last close.
Hennie Fourie, a trader at Cape Town-based PSG Konsult said, although resources had a "much more downside risk than banks and industrials," firmer metal prices opened buying opportunities.
"There's a lot more value in stocks such as industrials, banks and financials than in mining stocks because mining stocks have had strong runs in the past few months," said Fourie. Global markets were mixed with Japan's Nikkei rising 2.98 percent, catching up after being closed for a holiday on Monday, but European shares were down sharply in early trade with the London FTSE 100 slipping 1.30 percent and the Paris CAC 40 losing 0.99 percent.
Dow Jones Newswires reported a sharp drop in US stock futures. The question now facing Wall Street is whether last week's reversal of fortunes for financial stocks and oil was another pause in longer-term moves down and up, respectively, or a major turning point for markets.
Anglo American advanced R4 to R435.80 and BHP Billiton collected R5.01, or 2.02 percent, to R253.01. Sasol was up R6.76, or 1.66 percent, at R413.01 as the price of crude oil remained steady above the $130 per barrel level.
AngloGold Ashanti gained R4.45, or 1.71 percent, to R264.45, Gold Fields improved R2.38, or 2.46 percent, to R99 and Harmony was R1, or 1.12 percent better, at R90.50. Anglo Platinum was up by R15.01, or 1.59 percent, to R961.01 and Impala Platinum by R5.13, or 2.16 percent, to R242.18. Aluminium processor Hulamin edged up five cents to R19.05.
Dimension Data fell 19 cents, or 2.80 percent, to R6.60. It earlier announced its intention to acquire the remaining 44.9 percent of the Singapore-listed shares of its Asian subsidiary Datacraft for a total purchase price of $276 million, or around R2.1 billion.
Telkom lost R1.59, or 1.13 percent, to R139.39. It said earlier that Vodacom, its 50 percent-owned cellular operator, increased revenue by 14.5 percent year on year for the quarter ended June 2008, while customers increased by 6.6 percent since end June 2007.
Standard Bank was R1.60, or 1.99 percent, weaker at R78.80, Nedbank fell R2.89, or 2.95 percent, to R95.01 and Absa weakened R3, or 3.33 percent, to R87.
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