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Johannesburg - The share prices of some of the heavyweights on the JSE responded positively on Friday morning to good corporate news which helped to pull the major indices higher.
Big shares like Naspers [JSE:NPN], SABMiller [JSE:SAB] and Richemont [JSE:CFR] continued their upward momentum of the past few days and by midday the industrial index was 1.23 higher.
This helped the All Share-index strengthen by 0.83% stronger to 54 324 while the Top 40-index gained 0.92% in morning trade to be at 48 260 points by midday.
A rise of more than 4% in the Barclays Africa [JSE:BGA] share price, after Imara SP Reid said the banking group offered a buying opportunity, also helped the financial index 1.16% higher to end the sell-off in banking shares over the past few days.
The uptick in the prices of recovery shares seems to have run out of steam and the resources 10-index was again lower, this time it lost 0.78%. The volatile gold index lost 3.26% and was midday at 1 200 points, a very important support level.
READ: Gold near 3-month high, eyes gain on US rate outlook
The mood on the market also received a boost from Wall Street, where the Standard & Poor-index closed on a new record after a strong run in the price of technology shares such as Apple and Facebook.
Analysts said the continuous high levels of the US market are a reflection of loose monetary policy. They are however sceptical of the sustainability of the run, which was mainly due to technical factors.
"The problem is the last few times we got one of these big up days, there was no follow-through the next days," said Mace Blicksilver, director of Marblehead Asset Management. "Today is nice, but tomorrow (Friday) is the real test."
Richemont was one of the star performers on the JSE when it gained 3.22% to trade at R108.99. The group said in a trading statement that Richemont’s net profit for the year ended March 31 2015 is expected to show a decrease of some 36%.
This reflects non-cash, mark-to-market losses on financial instruments, which had no material impact on the company’s net cash position.
Investors were, however, more interested to hear that the group’s operating profit was expected to show an increase of 10% and that sales would have increased by 5% on a reported basis and by 2% on a constant currency basis.
SABMiller, which announced solid results earlier in the week, gained another 1.31% to R677.00 on Friday morning after the announcement that it would acquire British craft beer firm Meantime Brewing Company. SABMiller is now 7.5% higher for the week.
This transaction will give SABMiller exposure to the fastest-growing part of the British beer market and it planned to grow the sales of Meantime’s beers across Britain and would also look to export it to other European markets.
Meantime’s beers include London Pale Ale and London Lager. It grew sales volumes 58% in 2014, compared to a 1% rise in Britain’s beer market as a whole.
Naspers was higher for the third consecutive day after good results from its Chinese subsidiary, Tencent, earlier his week. Naspers traded another 1.16% stronger on R1 855.01.
The surprise of the morning was PPC [JSE:PPC], which gained almost 7% on the news that provisional anti-dumping duties of between 14.29% and 77.15% have been imposed on Portland cement originating from Pakistan.
There was more than a million tons of dumped cement imports from Pakistan in 2014 at prices between 14.29% and 77.15% less than the ex-factory selling price in Pakistan.
PPC’s share price has been on the slide lately, but the share traded 6.69% higher this morning on R18.34 and traded as high as R18.60. The share price is however still 5.03% lower for the week and 33.5% softer over the past 90 days.
Aspen [JSE:APN] was one of the busiest shares on the JSE this morning and gained 4.88% to R369.02. The group said in a cautionary statement that it is currently engaged in discussions regarding a possible acquisition of an infant nutritionals business. These discussions may have a material effect on the share price
Barclays Africa received a boost when the technical analysts of Imara SP Reid indentified the share as a buying opportunity. The share price traded 4.04% higher on R185.72.
The analyst said that the recent drop in the share price from R193.88 to R178 on Thursday presented a technical opportunity. The first target price is R187.00.
FirstRand [JSE:FSR] gained 0.99% to R54.14. Old Mutual [JSE:OML] was one of the busiest shares on Friday morning and was at midday 0.82% higher on R43.00.
