Share

JSE falls as iron ore producers take a beating

Johannesburg - South African stocks slipped 0.6% on Friday, with shares of Kumba Iron Ore and other ore producers hammered as prices of the steel-making ingredient hit a five-year low.

Shares of small-cap technology firm Pinnacle Holdings sank 11% to R12 after it said it would not pay a dividend this year to preserve cash and bring down debt.

Spot iron ore .IO62-CNI=SI fell to $83.60 per tonne on Friday, its lowest since September 2009, with some market participants saying its oversupply could continue to weigh on shares of South African mining houses.

"The talk of the town for the last week or so about Kumba has been that the iron ore price keeps dropping," said Kyle Dutton, a broker at Mercato Financial Services in Johannesburg.

"There's just been an oversupply. That's the main issue. Everyone thought China was going to grow more. It's still growing, but everyone thought it was going to grow more, and quicker."

Kumba dropped 4.7% to R295.40.

Iron ore and manganese mining company Assore declined 2.6% to R308.50. African Rainbow Minerals, which mines iron ore as well as platinum and coal, dropped 3.1% to R168.63.

The benchmark Top-40 index gave up 0.61% to 46 388. The broad All-Share index slipped 0.74% to 51 789.

While the Top-40 is up nearly 12% this year, its recent performance has been decidedly lacklustre, having barely budged over the last four weeks.

Nonetheless, Johannesburg remains expensive compared to other emerging market indices.

The Top-40 is trading at a price-to-earnings ratio of nearly 19, making it the fourth-most expensive index among 32 emerging stock markets, according to Thomson Reuters data.

"We're phenomenally expensive and it's been like that for awhile," said Mercato's Dutton. "Something is going to happen at some stage, I think we need a catalyst of some kind."

Trade was thin, with 145 million shares changing hands, according to preliminary data, well below last year's daily average of 176 million shares.

A total of 112 shares advanced, 186 declined and 54 were unchanged.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.95
-0.2%
Rand - Euro
20.46
+0.0%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.3%
Platinum
911.00
+1.6%
Palladium
1,008.15
+0.6%
Gold
2,217.47
+1.0%
Silver
24.78
+0.5%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders