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All-share hits key 50 000 mark

Johannesburg - The All-share Index on the JSE reached the magic 50 000 mark just before midday on Thursday, as it seems that investor concern over share valuations is subsiding.

By midday the All-share index was 0.71%  higher on 50 001, after closing only marginally higher on Thursday. The Top-40 Index traded at 44 980, 0.76% better than Wednesday’s close.

Foreign buyers, who are still chasing higher yields in South Africa because interest rates in the developed world are at record lows, are particularly interested in companies with big market capitalisations and international activities. This include shares like Naspers, SABMiller and Richemont.

Some commentators thought that the run of these heavyweights was over, but it seems they were wrong.  SABMiller gained 3.1% on Thursday morning and traded at a new record of R589.74.

Richemont, which produced solid results last week, was close to the record established a few months earlier and was 0.54% stronger at R108.40. 

Naspers is now steadily moving upwards after losing about 25% or R345 of its value in just over a month, because of fears that its own valuation might be too high as well that of Tencent, the Chinese internet giant in which Naspers has a 34% interest and which provides a big chunk of its income.

Since then Tencent has surprised the market with a 60% profit rise. This week Naspers has been edging higher every day. By midday it was 0.25% up at R1 2230.00, and it has now recovered two-thirds of its losses.

These shares are all major role players in the industrial index, which was the star performer on Thursday morning and strengthened by 0.95%.  

The resources index was also a strong performer on Thursday morning, gaining 0.7%. The market was boosted by the latest purchasing managers' index in China, which strengthened for the second month in a row.

Although the index is still below the 50 mark, which means that the sector is still contracting, the latest numbers indicate that the contraction has slowed down.

This is excellent news for South African companies which sell a major portion of their production to Chinese industries. By midday Anglo American traded 0.55% higher at R271.70.

Platinum shares continued their run from Thursday on the back of news that arbitration by the Labour Court might bring an end to the strike in the industry.

Platinum shares were also supported by news that the expected shortfall inproduction to meet the market's needs is likely to grow because of the strike. The platinum price improved by 6% on Thursday morning.
   
Anglo American Platinum increased by 1.36% to R475.90 and Lonmin, whose share price has been under a bit of pressure lately, gained 1.13% to R44.80.

Royal Bafokeng Platinum, which is not affected by the strike, is currently trading at bumper levels and increased by 0.51% to yet another record of R73.05.

 - Fin24
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Rand - Dollar
18.94
-0.0%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.13
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Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
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Silver
24.95
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Brent Crude
87.00
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Top 40
68,346
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All Share
74,536
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Resource 10
57,251
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Industrial 25
103,936
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Financial 15
16,502
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