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Johannesburg - Local news was on the forefront this morning on the JSE as investors are looking for new incentives to take the market forward.
The market reached new record levels in the beginning of the last week, but lost most of that momentum towards the end of the week. On Monday morning the indices were edging upwards, but the moves were initially very tentative before gaining momentum later in the day.
Most of the attention was on company news which is painting a mixed picture of the economy. Food companies such as Pioneer Foods [JSE:PFG] and Famous Brands [JSE:FBR] reported solid growth, but Abil’s shocking results have shown that consumers are in deep financial trouble.
By midday, the All-share index was only 0.53% higher on 49 421 points and the Top 40-index rose 0.53% to 44 322 points. All the major indices were higher.
Analysts said investors are in two minds. Some think last week’s correction is the beginning of a bigger correction, while others regard last week's lower close as a breather for the market to go to go even higher. By midday, it seems that the latter group was probably right.
Abil’s first half loss of 240.7c a share paints a grim picture of economic conditions, but most of the bad news from Abil seems to be discounted. The loss was due to an additional R600m of bad debt which was not expected, but the share price rose with 3.79% to R8.77 after losing 9% of its value last week after Abil’s profit warning.
The news that Vodacom [JSE:VOD] is taking over 100% of Neotel for R700m, which will give his network and product range a big boost, is also mostly discounted as the share price lost 1.85% to R126.57. Its main competitor MTN [JSE:MTN] is still trading at record levels after increasing with 0.49% to R223.09 this morning.
The same can be said about Barloworld [JSE:BAW] which traded 1.06% lower on R111.39 despite a rise of 10% in profit for the first half year. The profit growth was achieved despite delays in big projects which had a negative effect on activities.
But the market responded very positive to the news that Anglogold Ashanti [JSE:ANG] will slash its exploration budget from R400m to between R150m and R175m and will restructure its loss making Obuasi mine in Ghana. The share price increased with 3.25% to R181.65.
Investors also responded to the news that Netcare [JSE:NTC] increased its interim earnings with 19.5% due to increased local demand and the weak rand and gained 3.66% to R26.59. Netcare is trading at record levels since a favourable profit warning last week. Netcare’s competitor MediClini International [JSE:MDC] is also close to record levels after indicating last week that solid results are on its way. The share rose 1.78% to R77.34.
In the food sector Famous Brand’s profit increased with 20% but the share price was only 0.05% higher on R111.00. Pioneer Foods traded unchanged at R96 despite a rise of 10% in first half earnings.
Astral Foods [JSE:ARL] surprised the market with an increase of 308% in headline earnings for the first half of the year and a dividend of 200 cents per share. That share price shot up after the news but traded sideways the rest of the morning and was 2.70% higher by midday on R104.50.
The market reached new record levels in the beginning of the last week, but lost most of that momentum towards the end of the week. On Monday morning the indices were edging upwards, but the moves were initially very tentative before gaining momentum later in the day.
Most of the attention was on company news which is painting a mixed picture of the economy. Food companies such as Pioneer Foods [JSE:PFG] and Famous Brands [JSE:FBR] reported solid growth, but Abil’s shocking results have shown that consumers are in deep financial trouble.
By midday, the All-share index was only 0.53% higher on 49 421 points and the Top 40-index rose 0.53% to 44 322 points. All the major indices were higher.
Analysts said investors are in two minds. Some think last week’s correction is the beginning of a bigger correction, while others regard last week's lower close as a breather for the market to go to go even higher. By midday, it seems that the latter group was probably right.
Abil’s first half loss of 240.7c a share paints a grim picture of economic conditions, but most of the bad news from Abil seems to be discounted. The loss was due to an additional R600m of bad debt which was not expected, but the share price rose with 3.79% to R8.77 after losing 9% of its value last week after Abil’s profit warning.
The news that Vodacom [JSE:VOD] is taking over 100% of Neotel for R700m, which will give his network and product range a big boost, is also mostly discounted as the share price lost 1.85% to R126.57. Its main competitor MTN [JSE:MTN] is still trading at record levels after increasing with 0.49% to R223.09 this morning.
The same can be said about Barloworld [JSE:BAW] which traded 1.06% lower on R111.39 despite a rise of 10% in profit for the first half year. The profit growth was achieved despite delays in big projects which had a negative effect on activities.
But the market responded very positive to the news that Anglogold Ashanti [JSE:ANG] will slash its exploration budget from R400m to between R150m and R175m and will restructure its loss making Obuasi mine in Ghana. The share price increased with 3.25% to R181.65.
Investors also responded to the news that Netcare [JSE:NTC] increased its interim earnings with 19.5% due to increased local demand and the weak rand and gained 3.66% to R26.59. Netcare is trading at record levels since a favourable profit warning last week. Netcare’s competitor MediClini International [JSE:MDC] is also close to record levels after indicating last week that solid results are on its way. The share rose 1.78% to R77.34.
In the food sector Famous Brand’s profit increased with 20% but the share price was only 0.05% higher on R111.00. Pioneer Foods traded unchanged at R96 despite a rise of 10% in first half earnings.
Astral Foods [JSE:ARL] surprised the market with an increase of 308% in headline earnings for the first half of the year and a dividend of 200 cents per share. That share price shot up after the news but traded sideways the rest of the morning and was 2.70% higher by midday on R104.50.
