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Johannesburg - The JSE continued to inch its way higher on Friday morning after the market received a further boost on Thursday afternoon on publication of the minutes of the last meeting of the US Federal Reserve.
The minutes strongly cemented the notion that US interest rates are unlikely to rise during the remainder of 2015.
This is particularly good news for emerging markets such as South Africa, because it decreases the possibility that investors will seek higher yields in developing markets where the risks are perceived to be lower.
The adjustment in the fundamental picture related to yields is also bad news for the dollar, with positive implications for commodity prices and the currencies of commodity-producing countries.
The rand traded at R13.27 to a dollar on Friday morning which is the highest in almost three weeks, and the local bond market was the strongest in two months. The platinum price increased by $30.55 or 3.22% to $979.16, while the gold price at midday was 1.51% or $17.11 stronger at $1 156.10.
By midday the All-share index was another 0.77% higher at 52 133 points, which means it has gained more than 6% since September 28, when it was as low as 49 383 points. The Top 40 index gained 0.76% to 47 654 points to break through important resistance levels.
The star performer was again the resources sector, which gained 3.84% to 37 253 points. The index at midday was almost 16% higher than the closing level of 31 362 points on September 27.
The sector was again pushed higher by those shares which had been the most severely hit by the downturn in commodity prices, but are now making spectacular recoveries.
Shares like Glencore [JSE:GLN], ArcelorMittal [JSE:ACL] and Lonmin [JSE:LON] all gained more than 10% and have all now risen more than 50% since September 28, when their prices were at 52-week lows. The prices are however still far below the 52-week highs reached earlier in the year.
ArcelorMittal was the star performer on Friday, gaining 16.85% to trade at R16.85. This is more than 50% higher than the 52-week low of R8.42 reached on September 28. For the year to date, the share is 59.11% lower.
Glencore was 10.28% stronger at R26.50, which is more than 60% higher than the low of R15.40 reached on September 27. Analysts said the stock made a turnaround when the company reassured investors about the strength of its balance sheet and the share price gained more than 45% in three days on the Asian markets.
Lonmin’s recovery is the most spectacular so far and the share price of R7.92 at midday is now more than 150% higher than the recent low of R3.12. The current rise is from a low base as the share price is still more than 70% lower than three months ago.
Lonmin said the stronger platinum price will enable it to issue shares to raise the cash it needs.
Anglo American [JSE:AGL] is also on a strong recovery trail and the share price gained 6.14% to trade at R146.18, which means it has gained almost 20% over the past seven days. BHP Billiton [JSE:BIL] traded 3.19% higher at R241.25 and is now 11% higher than a week ago.
Anglo American and Glencore, which are both big coal producers in South Africa, received a further boost with news that the country’s coal miners may end a strike after the National Union of Mineworkers on Thursday said it had received a revised wage offer from coal producers.
“There is a slight sense of a glimmer of hope that we would get an agreement tonight,” said Peter Bailey, NUM's chief negotiator for the coal sector.
The union and the Chamber of Mines are meeting after coal sector workers started a strike on Sunday, following the collapse of wage talks last week.
READ: Talks to end coal strike resume
The Industrial index rose only 0.29% on Friday but at 70 390 points is on yet another all-time high. Some of the biggest heavyweights in the sector also reached new highs.
Richemont [JSE:CFR] gained 1.67% to reach a new high of R116.34 and Bidvest [JSE:BVT] was 0.94% stronger on a new high of R347.17. British American Tobacco [JSE:BTI] made a strong start to reach a new intraday high of R770.75, but lost momentum later in the morning. By midday the share price traded 0.01% softer at R767.39
Sasol [JSE:SOL] gained 4.44% thanks to the stronger oil price and traded at R459.52, which means the share price is more than 13% higher than seven days ago.
Investment company PSG [JSE:PSG] was 3.11% higher on a new high of R252.20 at midday. The share price has gained almost 25% over the past 30 days.
