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AngloGold drags JSE lower

Johnnesburg - AngloGold Ashanti led South African stocks lower on Wednesday after the gold producer said it would be splitting its domestic and global operations and seek $2.1bn in a rights issue.

Shares in AngloGold fell as much as 14.7% but had recouped some of the losses to end 14.2% lower at R144.65.

AngloGold said it would split its business between a new London-listed company focusing on the global operations while it would remain domiciled in Johannesburg to oversee the South African mines.

The demerger mirrors moves by other mining companies seeking to reduce exposure to South Africa, the vast resources of which are accompanied by the risk of a volatile labour market, policy uncertainty, dizzying shaft depths and soaring costs.

“Investors are worried about what they will be left with in the end, with no hedge from the global operations," said Abri du Plessis of Gryphon Asset Management, which does not hold shares in AngloGold.

"People see the international operations as being much more diversified and much more stable."

The benchmark Top-40 index ended down 1.03% at 45 864 and the All-share index fell 0.89% to 51 246.

Other big movers included Aspen Pharmacare which gained almost 5% after the generic drug maker reported a one-third rise in full-year profit.

Trade was relatively thin, with 167 million shares changing hands, according to preliminary data, below last year's daily average of 176 million shares. A total of 194 shares declined, 114 advanced and 50 were unchanged.

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Rand - Dollar
18.92
+0.1%
Rand - Pound
23.88
+0.1%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.13
+0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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