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Strike threat weighs heavily on JSE

Johannesburg - South Africa’s uncertain labour relations, including the upcoming strike in the steel and engineering industries, weighed heavily on the JSE on Monday morning, as the market looked for direction after last week’s correction when the major indices closed lower on four of the five days.

Shares of companies which will be affected by the strike, such as ArcelorMittal [JSE:ACL] and Bell Equipment [JSE:BEL], were trading at new 52-week lows.

And in the platinum sector, which was disrupted for five months by a strike in the Rustenburg area, Anglo American Platinum (Amplats) [JSE:AMS] shares were lower after the company announced it is reviewing its activities in that area.

There were even reports in the British media that Anglo American [JSE:AGL] plans to sell some of its South African platinum assets.

By midday on Friday the All-share index was only 0.08% higher at 50 668 points, while the Top 40 index was 0.11% stronger at 45 702 points. There was, however, much volatility in Monday morning trade. The All-share index initially rose about 0.20%, then lost all gains before it started to recover again.

The best performer on Monday morning was the Financial index which improved by 0.49%, while the Industrial index strengthened by 0.33%. The resources index lost 0.56%, with gold 1.19% lower due to a weaker gold price.

The mood was further dampened by weak overseas markets. Wall Street closed lower on Friday on disappointing data on consumer spending in the US, and other markets followed Wall Street lower on Monday morning.

Among the steel companies to be affected by the upcoming strike, ArcelorMittal was 2.18% lower at R30.91, a new 52-week low.

Bell Equipment, which has been struggling since a profit warning earlier in June, traded 1 cent down on Friday’s low at R13.47. The company, which produces earth-moving equipment, was severely affected by the strike in the platinum mines and warned earlier this month that earnings for the first half of the current financial year would be 75% lower than a year ago.

Now it is facing another strike that can affect production.

But the big talking point on Monday morning was Amplats' announcement that it was reviewing options for its Rustenburg operations, which were hit by the strike that ended last week. Details are expected soon when the group will announce its interim results.

Amplats’ share price slipped by 1.46% to R455.75. The group’s parent company Anglo American traded virtually unchanged at R455.75.

Britain’s Sunday Times reported on Sunday that Anglo has signalled its intention to possibly dispose of some of its ageing platinum assets in South Africa, and that Rand Merchant Bank will conduct the auction.

Most banking shares were higher after last week’s correction. Barclays Africa [JSE:BGA] was 0.47% higher at R159.64 and Standard Bank [JSE:] gained 0.55% to R144.58. FirstRand [JSE:FSR] was also 0.84% stronger at R40.62.

African Bank [JSE:ABL], which made a strong turnaround on Friday when it rose by 11% from its 52-week low, improved by another 0.44% to R6.83.

 - Fin24
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Rand - Dollar
19.02
-0.6%
Rand - Pound
24.00
-0.4%
Rand - Euro
20.52
-0.3%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.6%
Platinum
900.40
+0.4%
Palladium
998.40
-0.3%
Gold
2,212.97
+0.8%
Silver
24.70
+0.2%
Brent Crude
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Top 40
68,068
+0.6%
All Share
74,264
+0.5%
Resource 10
56,909
+2.2%
Industrial 25
103,553
+0.3%
Financial 15
16,463
-0.4%
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