Publications
Partners
Johannesburg - The JSE continued with its merry-go-round on Friday, with the Financial index falling back after a strong performance of Thursday and the Resources index changing its status from victim of profit taking to star performer.
It seems as if investors are using any run in share prices to take profit while they see corrections as a buying opportunity. This could indicate a search for value in what is generally regarded as an overvalued market.
By midday on Friday, the All-share index was 0.22% higher on 50 709 points, while the Top 40-index increased with 0.31% to 45 727 points. The Financial index was 0.72% lower while the resources index added 1.12%.
The resources sector was probably boosted by the news that the mining companies and the unions are about to reach an agreement that will end the five-month-long strike in the platinum sector, but the bad news for mining companies is that the possibility of an end to the strike pushed the platinum and palladium prices down.
Share prices did not respond much to the news that ratings agency Fitch kept its credit rating of South Africa unchanged, but changed the prospects for the rating from stable to negative. This indicates that the agency thinks that there is a stronger possibility that the next move in the rating will be down rather than upwards.
Although the rand gave up all gains made on Thursday when the news of a possible end to the strike broke, the currency did not fall out of the bus in reaction the Fitch announcement. The currency traded at R10.748/$ by midday.
The market is however still waiting for Standard and Poor’s review, which is also due on Friday.
The treasury responded to Fitch’s announcement by saying that Fitch’s concerns about growth arise partly from the strike that has affected part of the platinum sector.
Government is "alive to the growth challenges South Africa faces", it said.
"We are committed to the fiscal path and expenditure ceiling. While short term cyclical factors might cause marginal deviations from targets, we will not deviate from the long term trajectory."
All the platinum shares were higher on Friday morning and investors in the two big platinum shares did not suffer any losses due the prolonged strike that brought the community of Rustenburg on its knees.
Anglo American Platinum (Amplats) [JSE:AMS] traded 1.96% higher on R479.50 and is now only R1.50 below its previous record. Despite the fact that the three platinum groups in the Rustenburg area lost more than R22bn in revenue, investors in Amplats earned capital growth of 53% in the last twelve months.
The Impala [JSE:IMP] share price is 17.8% higher than a year ago after it improved with 0.84% to R113.95 on Friday.
The only platinum share that suffered losses is Lonmin [JSE:LON], whose activities are all in the affected Rustenburg area. The share only gained 0.15% to R45.95 on Friday. Although the share price is still 8.3% higher than twelve months ago, investors lost a modest 6.3% in the last six months.
Smaller platinum shares are also in demand. Royal Bafokeng Platinum [JSE:RBP], which is developing exciting new mines, traded 0.27% higher on R73.95 and is now only 9c lower than the record set last moth. Northam [JSE:NHM], which also survived a strike earlier in the year, rose 0.3% to R46.14.
Telkom’s [JSE:TKG] improved results, which were announced on Friday morning, have already been discounted by the market. The share price fell 0.30% to R42.01 after reaching a new high of R42.14 on Thursday.
Management warned on Friday that the company is not completely out of the woods, despite an improvement of 35% in headline earnings. Revenue increased only with 1% after the revenue from fixed line operations decreased with another 7%. Mobile revenue is 70% higher.
It seems as if investors are using any run in share prices to take profit while they see corrections as a buying opportunity. This could indicate a search for value in what is generally regarded as an overvalued market.
By midday on Friday, the All-share index was 0.22% higher on 50 709 points, while the Top 40-index increased with 0.31% to 45 727 points. The Financial index was 0.72% lower while the resources index added 1.12%.
The resources sector was probably boosted by the news that the mining companies and the unions are about to reach an agreement that will end the five-month-long strike in the platinum sector, but the bad news for mining companies is that the possibility of an end to the strike pushed the platinum and palladium prices down.
Share prices did not respond much to the news that ratings agency Fitch kept its credit rating of South Africa unchanged, but changed the prospects for the rating from stable to negative. This indicates that the agency thinks that there is a stronger possibility that the next move in the rating will be down rather than upwards.
Although the rand gave up all gains made on Thursday when the news of a possible end to the strike broke, the currency did not fall out of the bus in reaction the Fitch announcement. The currency traded at R10.748/$ by midday.
The market is however still waiting for Standard and Poor’s review, which is also due on Friday.
The treasury responded to Fitch’s announcement by saying that Fitch’s concerns about growth arise partly from the strike that has affected part of the platinum sector.
Government is "alive to the growth challenges South Africa faces", it said.
"We are committed to the fiscal path and expenditure ceiling. While short term cyclical factors might cause marginal deviations from targets, we will not deviate from the long term trajectory."
All the platinum shares were higher on Friday morning and investors in the two big platinum shares did not suffer any losses due the prolonged strike that brought the community of Rustenburg on its knees.
Anglo American Platinum (Amplats) [JSE:AMS] traded 1.96% higher on R479.50 and is now only R1.50 below its previous record. Despite the fact that the three platinum groups in the Rustenburg area lost more than R22bn in revenue, investors in Amplats earned capital growth of 53% in the last twelve months.
The Impala [JSE:IMP] share price is 17.8% higher than a year ago after it improved with 0.84% to R113.95 on Friday.
The only platinum share that suffered losses is Lonmin [JSE:LON], whose activities are all in the affected Rustenburg area. The share only gained 0.15% to R45.95 on Friday. Although the share price is still 8.3% higher than twelve months ago, investors lost a modest 6.3% in the last six months.
Smaller platinum shares are also in demand. Royal Bafokeng Platinum [JSE:RBP], which is developing exciting new mines, traded 0.27% higher on R73.95 and is now only 9c lower than the record set last moth. Northam [JSE:NHM], which also survived a strike earlier in the year, rose 0.3% to R46.14.
Telkom’s [JSE:TKG] improved results, which were announced on Friday morning, have already been discounted by the market. The share price fell 0.30% to R42.01 after reaching a new high of R42.14 on Thursday.
Management warned on Friday that the company is not completely out of the woods, despite an improvement of 35% in headline earnings. Revenue increased only with 1% after the revenue from fixed line operations decreased with another 7%. Mobile revenue is 70% higher.
