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Resources‚ industrials buoy JSE

Johannesburg - The JSE was in positive territory on Monday morning‚ as losses in the gold mining and banking spaces were offset by gains in resources and industrials.

Gold miners and banks showed a softer bias as concerns about the health of unsecured lending and poor mining production figures weighed.

At 9:22‚ the JSE All Share [JSE:J203] index was up 0.39% to 39 747.05 points‚ with the Top 40 - (Tradeable) [JSE:J200] blue-chip index gaining 0.46%.

Resources and industrials were up 0.89% and 0.29% respectively‚ while gold miners slipped 0.17% and banks were off 0.27%.

On the international front the economic environment became even more supportive last week‚ Rand Merchant Bank said in a note.

“Not only has the US Federal Reserve and the European Central Bank turned more dovish‚ the Bank of India also cut interest rates on Friday. It seems the Reserve Bank of Australia and the Bank of Korea may follow suit this week. It is evident that central banks have turned even more accommodative and are clearly supporting global economic activity‚” the bank said.

“Supporting the notion that growth is not about to stall was the release of a better than expected US payrolls report on Friday‚ with the world’s largest economy creating 165‚000 jobs last month. The US remains stuck around a 7.5% level of unemployment‚ the Fed will continue to maintain a dovish stance and the global carry trade will remain in vogue‚” RMB said.

“Global economic data releases and events this week are unlikely to move markets as much as the developments last week. The UK and Japanese markets are enjoying a bank holiday today (Monday). We will be following the Reserve Bank of Australia’s policy announcement with interest tomorrow (Tuesday) and a speech by Federal Open Market Committee chairman Bernanke on Friday‚” RMB said.

On the local front‚ important for the wage negotiation season and the platinum sector would be the expected announcement on Monday of Amplats’s restructuring‚ RMB said.

“It is widely anticipated that the number of retrenchments will be less than initially indicated as government continues to put pressure on the industry to keep mines open‚” it said.

Amongst individual shares on the JSE BHP Billiton (BIL) gained 1.28% to R260 and Sasol (SOL) added 1.56% to R400.82.

Harmony Gold (HAR) was 0.31% firmer at R39.12 after it lost more than 9% on Friday. The company posted a headline loss per share for the quarter of 47c compared to earnings per share of R1.58 in the December quarter. Its gold output slipped 15% to 247‚529 ounces quarter on quarter.

Sibanye (SGL) lifted 1.86% to R8.20.

African Bank Investments (Abil‚ ABL)‚ SA’s biggest unsecured lender‚ shed a further 4.27% on Monday to R22.88‚ after it shed R4bn of its market capitalisation on Friday after a trading update forecast a double-digit decline in earnings and higher provisioning for bad debts. The counter dropped more than 17% on Friday‚ a level last seen in 2009.

Credit retailers also came under pressure on Friday due to concerns about unsecured lending and credit retail in general as Abil owns credit furniture business Ellerines.

Lewis (LEW)‚ however‚ recovered 3.4% to R56.89 on Monday morning after shedding more than 7% on Friday.

Discovery Holdings (DSY) added 1.53% to R85.80. 
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Rand - Dollar
18.92
+0.1%
Rand - Pound
23.87
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.13
+0.1%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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