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Resources sector boosts JSE

Johannesburg - Resources stocks made another strong run on Tuesday morning, with big global companies like BHP Billiton [JSE:BIL] and Glencore [JSE:GLN] reaching new 52-weeks highs.

The rest of the market was however not as buoyant, and the fact that the All-share index was marginally higher by midday on Tuesday was entirely due to the Resource index, which improved by more than 1%.

The All-share index was only 0.18% higher by midday at 51 633 points and the Top 40 index traded only 0.24% higher at 46 544 points. Resources stocks were 1.02% stronger, but the Industrial index was level by midday after it traded in the red for most of the morning.

The technical researchers of Imara SP Reid in Tuesday’s version of their daily market snapshot said that resources are from a technical perspective likely to make an attempt at edging higher.

The only factor that may inhibit resources is the relatively unchanged position of the rand, which traded at R10.71 to the dollar on Tuesday morning, but did not seem to play a role this morning.

The international environment is also positive for shares, with Wall Street on Monday night and the Asian markets on Tuesday morning both edging higher.

The star performer in the resources sector was again Glencore, which reached a new 52-week boost. The share traded 0.63% higher at R63.90, 40c topping its previous high.

Despite these high levels the Glencore share price is still 1% lower than 12 months ago, but over the last three months the share has improved by 14.2%. This indicated that Glencore was listed at a very high valuation, because the price to earnings ratio is currently 28.81 which does not leave much room for improvement.

BHP Billiton is probably the share among the three diversified resources giants with the best growth potential. Stocks at one stage traded at R370.74, higher than the previous best of R370.24 set earlier this month.

However, by midday on Tuesday the share price fell back to R370.19, still 1.63% higher than Monday.

Investors in BHP Billiton have seen the value of their shares grow by 34.6% over the last 12 months, but the share is still trading at a PE ratio of only 14, which is half of those of Anglo American [JSE:AGL] and Glencore.

Anglo American is the resources stock which has performed the best over the last 12 moths, with growth of 41.4%. The share rose by 1.59% to R278.50 and is now fast approaching the 52-week high of R286.70 set in May this year.

 - Fin24
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Rand - Dollar
18.91
+0.1%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.13
+0.1%
Platinum
908.05
+1.2%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent-ruolie
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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