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Johannesburg - Johannesburg stocks rose nearly 1% on Tuesday, as investors returned to resource heavyweights African
Rainbow Minerals, BHP Billiton and other shares that have been battered down in
a recent sharp sell off.
Stocks briefly pared some gains in late afternoon trade after South
Africa’s parliament passed a state secrecy bill that critics charge could dent
the country’s long-term reputation among foreign investors.
Continued concerns about the debt crisis in both the United States
and Europe also helped cap gains, traders said.
“It’s a bit of a wait and see, unfortunately, a lot of damage has
been to the charts technically and if we don’t see a recovery soon we are
pointing to more downside,” said Devin Shutte, an equity and derivatives trader
at Newstrading.
South Africa’s benchmark Top 40 - (Tradeable) [JSE:J200] index finished up 0.97% at
28 002.10, just above the psychologically important level of 28 000. The index
booked its biggest one-day drop in 7 weeks on Monday, tumbling 2.5%.
The All Share [JSE:J203] index, the widest measure of South African stock
performance, rose 0.8% to 31 369.74.
African Rainbow Minerals, a diversified miner with assets in coal,
base metals and platinum, rose 2.1 percent to 172.60 rand. Shares of the company
fell nearly 4 percent in the previous session and dropped nearly 7 percent in
the five sessions to Monday.
BHP Billiton, the global miner, rose 1.2% to R235.96.
Shares of the company fell 3.7% on Monday.
Worries about bill
Parliament’s passage of bill protecting state secrets could be seen as a negative by foreign investors calling for more transparency in Africa’s biggest economy, traders said.
Parliament’s passage of bill protecting state secrets could be seen as a negative by foreign investors calling for more transparency in Africa’s biggest economy, traders said.
Critics believe it will hide graft from public view and intimidate
those that try to expose it.
Shares briefly pared some gains after the bill was passed while the
rand took a knock on the news as well, easing nearly 1.5 percent to a nine-week
low.
“Foreigners are looking at it as quite a negative,” said Bernhard
Grobler, Investec’s head of stockbroking in Johannesburg.
“They would be taking money out of the country as a result of that,
having a negative effect on our equity market. Probably we would see a flow out
of bonds as well.”
Ratings agency Moody’s has downgraded South Africa’s outlook,
saying it is worried about increasing government interference in the economy,
while the country has been sliding in Transparency International’s gauge of
perceived corruption from 38th in the world in 2001 to 54th in 2010.
Gold stocks gained, helped in part by a recovery in the price of
the precious metal. Harmony Gold, South Africa’s third-largest gold producer,
gained 3.76 percent to 109.49 rand, while bigger rival AngloGold Ashanti was 2.4
percent stronger at 374.85 rand.
Shares traded stood at 202 million, according to preliminary data
available from the Johannesburg exchange at 1516 GMT. A total of 207 million
shares changed hands on Monday.
Nearly half of the 350 counters on the bourse gained, 122 shed
value and 79 remained unchanged.
