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Last Updated: Tuesday, 09 February 2010 18:07:02

Metals see JSE extend gains

Published: 2009/11/23 12:51:49 PM

METALS led the upside as the JSE extended gains by noon today, with metal prices rising on the weak dollar with gold reaching new highs.

In noon trade, the JSE all share index was 1.08% higher, with resources adding 1.78%, gold producers firming 1.50% and platinum miners up 1.62%.

Banks gained 1.10%, financials collected 0.54% and industrials moved 0.57% higher.

The rand was bid at R7.48/$, from R7.55/$ when the JSE closed on Friday. Gold was quoted at $1,165 a troy ounce from $1,140.75 at the JSE's last close, and platinum was at $1,469.50/oz, from $1,433/oz at its previous close.

"We have seen the dollar weaken a bit and that has pushed up the dollar prices of metals, gold particularly reaching new highs, and that had pushed the market up considerably," a trader said.

"It's just showing that the dollar is still a very big factor and the market is watching that. There are a number of economic indicators out this week and we will be watching those.

"Last week we saw a bit of profit taking and now the market has picked up from the low prices, we are mostly stronger on the metal prices. The rand is strengthening now a little bit, but it's not strengthening a lot against the weaker dollar," he said.

"For the rest of the day, Dow futures are looking quite strong and it looks like we are going to remain positive. It looks like we are going to continue on the upside," he added.

Dow Jones Newswire reported that the FTSE 100 was up as a rise in spot gold prices drives miners higher, with the positive tone set to continue over the course of the day, said Michael Hewson, analyst at CMC Markets.

While some degree of profit taking is likely ahead of the Thanksgiving holiday on Thursday, commodities are likely to remain well bid, said Hewson.

Cadbury +2.2% amid news Nestle may bid for the company and after reports Hershey's trustees are pushing it to launch a rival bid for the chocolate maker. Investors will turn their attention to US existing home sales later today.

The FTSE was last up 1.66%.

US stocks are called to open firmly higher as confidence in equity markets strengthens. David Morrison at GFT called the DJIA up 87 points and the S&P 500 up 11 points. Morrison said, "Investors continue to pile into risk assets as they search out yield while anticipating that at some stage, inflation will return." Also notes dollar weakness as central bankers are expected to keep rates low and traders look for stimulus packages to be extended or even increased. In economic news, US existing home sales are due later this afternoon.

Back in Johannesburg, Anglo American plc gained R8, or 2.54%, to R323.50 and BHP Billiton moved R3.97 higher, or 1.74%, to R231.49.

Petrochemicals group Sasol was up R2.21 to R294.21.

Paper group Sappi rose 45 cents, or 1.41%, to R32.45.

Highveld Steel collected 38 cents to R65.38 and Kumba Iron Ore put on R6.07, or 2.37%, to R262.70.

AngloGold Ashanti picked up R6.50, or 1.98%, to R335.50, Gold Fields collected 92 cents to R110.32 and Harmony gathered R1.20, or 1.52% to R80.20.

Platinum miner Anglo Platinum pocketed R8.65, or 1.22%, to R716, Impala Platinum was R3.12, or 1.84%, stronger at R172.59 and Lonmin swelled R9.75, or 4.64%, to R220.

Among industrials on the JSE, SABMiller added R1.74 to R217.24 and Barloworld was up 96 cents, or 1.96%, to R50.

Banker Standard Bank was up R1.10, or 1.15%, to R96.55 and Absa rose R2.45, or 1.98%, to R126.50.

ABIL gained 65 cents, or 2.21%, to R30. Microlender African Bank Investments Limited today 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 R1.8bn 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 Tongaat Hulett was R1.26, or 1.33% higher, at R95.75.

Media group Caxton declined 26 cents, or 1.65%, to R15.49, while Naspers picked up R9.80, or 3.51%, to R289.30. Avusa gained 49 cents, or 3.06%, to R16.50.

Retailer Woolies collected 31 cents, or 1.82%, to R17.31, Lewis picked up R1.42, or 2.85%, to R51.28 and Pick n Pay rose 48 cents, or 1.21%, to R40.29.

Construction group Aveng added 45 cents, or 1.14%, to R40.

Telecommunications group MTN Group gave up R1.12 to R118.65, Telkom weakened 29 cents to R39.31 and Vodacom eased 4 cents to R57.26.

Healthcare group Netcare inched 5 cents higher to R12.05.

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 R23.232bn, 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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