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JSE prepares to aim for new heights

Johannesburg - Amid economic doom and gloom, particularly about the mining sector, the JSE is quietly preparing for a new onslaught on the all-time high set in July last year.

After the indices crept up slowly since the beginning of the year, the All-share index on Wednesday morning made its second attempt in two days to set up a new record.

On Tuesday share prices raced out of the starter blocks and the All-share index shot up to well above 52 200 before the market gradually lost momentum and closed virtually unchanged.

Wednesday morning’s action was more volatile. After the index again shot up to new record levels, there was a sharp drop of more than 200 points before it started to improve again.

By midday the All-share index was 0.10% higher at 52 164 points, while the Top 40-index also gained 0.10% to 45 964 points. The All-share index was still well within sight of new record levels.

South African sentiment is currently negative owing to load shedding, high unemployment and severe drought in the agricultural sector, but the local financial markets were quietly driven by overseas investors using cheap money made available by developed countries to stimulate those depressed economies to chase higher yields in emerging markets like South Africa.

That is why the local market seems to be relatively unperturbed by international crises such as the standoff between Greece and the European Union, and concerns about world economic growth.

Initially those investors chased big double-listed industrial shares with international businesses and big market capitalisations, but a stocks became more expensive the attention shifted to buying opportunities in the oversold resources market and financial shares.

Resources shares took a breather on Wednesday morning after some bad company results in the sector. Although the poor results of Kumba [JSE:KIO], Anglo American Platinum [JSE:AMS] (Amplats) and Harmony [JSE:HAR] were anticipated, the severity of the drop in earnings made investors realise how tough conditions are in the sector.

All these shares were again lower on Wednesday morning, with Anglo American [JSE:AGL] dropping only 0.24% to R203.53 and Amplats losing 1.67% to R364.97.

The two shares on the JSE linked directly to the oil price did not move much, although the price of crude lost some ground on concerns about the influence of slower economic growth in oil demand.

Sasol [JSE:SOL] lost ground slightly and traded 0.80% lower at R455.25, while BHP Billiton [JSE:BIL] was 0.22% higher at R266.09.

The big industrial shares improved marginally, pushing the Industrial index higher. Naspers [JSE:NPN] was only 0.01% stronger at R1 669.94 and SABMiller [JSE:SAB] gained 1.19% to R638.48.

Sanlam [JSE:SLM] was the busiest share on Wednesday morning in terms of volume and value, and 4.02 million shares were sold for R306.7m. The share price reached a new high of R76.85 after gaining 2.47%, beating the previous high of R75.00 set on Tuesday.

               
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Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
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Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent-ruolie
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Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
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Industrial 25
103,936
+0.6%
Financial 15
16,502
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