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Johannesburg - On Wednesday morning Anglo American [JSE:AGL] was one of the victims of the past month's continued pressure on resources shares when the iconic share dropped to a new 52-week low on the JSE.
Although the major indices on the JSE moved sideways in a narrow band on Wednesday morning due a stronger Industrial index, the Resources index dropped 1.69% to bring the past month's losses to just more than 10%. As recently as March 2, the index stood at 44 980 compared to 40 319 at midday on Wednesday.
This is mainly due to renewed pressure on commodity prices. The Gold index also lost another 4.28%.
The All-share index was at midday only 0.08% lower at 52 142 points, while the Top 40-index lost only 0.02% to 46 007. This was mainly due to a gain of 0.36% in the Industrial index, while the Financial index was only 0.11% lower.
The market is probably taking a breather before the Easter weekend, when it will be closed on Friday and Monday.
Commodity prices were mostly lower on Wednesday morning with gold, platinum and oil all losing further ground. Gold, which as recently as January 22 traded at $1 393, dropped further to only $1 181 on Wednesday morning, while the platinum price dropped from $1 279 on January 21 to only $1 135 on Wednesday morning.
Anglo American traded 0.96% lower at R181.99 on Wednesday morning after two of its big JSE-listed subsidiaries - Kumba Iron Ore [JSE:KIO] and Anglo American Platinum (Amplats) [JSE:AMS] - also reached new lows.
Anglo reached its previous low of R182.22 on January 13, but the share then recovered to R223.17 on February 19.
Share price losses accelerated over the last month with Anglo now having shed 17.22% over the first three months of the year, of which 16.95% was lost over the last 30 days.
Its main rival on the JSE, BHP Billiton [JSE:BIL], also lost 1.53% to R261.75. It decreased only 5.81% over the last month, supported by the delisting of some of some its non-core assets, and is still above the 52-week low of R221.82 set on January 13 this year.
Anglo’s share price is dented in particular by the massive losses suffered by its iron ore producer Kumba, which lost another 3.64% to R150.33, and that after the share reached a high of R401 as recently as April 9 last year.
Kumba’s share price is now 58% lower over the past year, a massive loss in value for Anglo. Most of these losses occurred during the last month, as the price dropped 32.3% over the course of the month.
Iron prices are now at the lowest level ever since records of the price began in 2008. The price took another knock last week when comments by Rio Tinto dashed any hopes that the market oversupply would soon be rectified.
The head of Rio Tinto, the world's second-largest iron ore miner, on Thursday dismissed as "harebrained" a suggestion by smaller rival Fortescue Metals Group that miners should cap output of the steelmaking material to boost prices.
Good news about manufacturing in China, the largest buyer of iron ore, did not support the market. China said its official purchasing managers' index came in at 50.1 last month, up from 49.9 in February. It is the first time since December that it exceeded the 50 level which separates expansion from contraction.
Amplats’ share price dropped sharply to as low as R291.61 on Wednesday, far lower than the 52-week low of R297.52. The share price later recovered and by midday was 0.92% higher at R300.26.
As recently as February 15 the share was still at R393, but it lost 23.17% over the last month.
Impala Platinum [JSE:IMP], which was trading at new lows all week, gained 0.7% to R77.81 after initially dropping to yet another low.
In the industrial sector the two high flyers, Naspers [JSE:NPN] (R 1876.05) and Steinhoff [JSE:SHF] (R76.77), set further new records. In the financial sector Capitec [JSE:CPI] was also at a new high after gaining another 1.9% to R535.00.
