The JSE weakened late in the day after news that Anglo American is not happy with BHP’s latest takeover offer.
On Wednesday, BHP sweetened its offer for a second time, upping what it is prepared to pay for Anglo from £34bn to £38.6bn (about R900bn). The latest offer represents an increase from the original proposal, on April 24, of more than 24%.
The moves caused BHP’s share price to fall the most since April 26, down 2.51% to R544.39. On the day before the first offer became public, it closed at R554.95. Due to it being one of the biggest companies on the JSE, with a market cap of more than R2.7-trillion, the move had a large effect on the resources index and the all share.
Anglo American was up 0.36% to R617.95. It is up more than 24% since the day before BHP made its first overture.
The all share ended the day down 0.4% at 79,492 points and the top 40 gave up 0.51%. The resources index was 1.62% lower with the precious- and industrial-metals indices losing ground.
The rand had its worst day in six weeks, falling with its emerging-market peers, on fears that it could be several more months before the US Federal Reserve begins to lower interest rates.
Most Fed officials who have spoken publicly recently have been their most hawkish in months, casting doubt on whether rates will be lowered this year.
At the beginning of the year the market was pricing in total Fed cuts of 150 basis points for 2024.
At 5.40pm, the rand had weakened 0.94% to R18.2344/$, 0.91% to €19.7781 and 1.18% to £23.2163. The euro fell 0.11% to $1.0841.
SA’s consumer inflation slowed slightly in April to 5.2% from 5.3% in March, with higher electricity and fuel prices keeping the rate stubbornly above where the Reserve Bank would like it to be, at the midpoint of its 3%-6% target band.
Momentum Investments economist Sanisha Packirisamy said: “Fuel inflation rose for a fourth consecutive month to 8.6%, driven by a significant 67c/l increase in April and one of 37c in May.”
She said, however, that core inflation “surprised” with a deceleration to 4.6% from 4.9%. Core inflation excludes volatile energy prices.
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