Johannesburg - Old Mutual [JSE:OML] was the big attention grabber on the JSE on Monday morning as the share price rocketed upwards on news that the British-based insurer might also disinvest from South Africa.
By mid-morning the share price was already 10.5% higher at R43.30 and Old Mutual was by a long way the busiest share on the JSE.
At that stage more than 4 million shares had already been sold, with FirstRand [JSE:FSR] and Anglo American [JSE:AGL] a poor second with more than 800 000 shares sold. The value of the transactions was more than R178m, far exceeding any other share.
Old Mutual’s spectacular rise pushed the All-share index marginally in the black, as most of the other sectors gave a rather lacklustre performance despite a good US jobs report on Friday, which gave markets around the world a fillip.
At mid-morning the All-share index was only 0.06% stronger at 52 230 points and the Top 40 index 0.20% up at 46 316 points. That was almost exclusively due to the Financial index, which gained 2.64% at that stage, after being more than 3% higher in earlier trade. The Industrial index was 0.58% lower and the Resources index 0.13% down, with the volatile Gold index losing 5.6%.
Old Mutual PLC said in a statement this weekend that it is considering all options as part of a strategic review, after Sky News reported the insurer is drafting a plan to split itself up into standalone businesses.
READ: Old Mutual soars on split speculation
The company said it will update investors when it reports its 2015 results on Friday, saying no decision has yet been made.
A breakup of the £9bn UK-based insurer would separate South Africa’s Nedbank [JSE:NED], its wealth unit and its emerging markets and institutional asset management businesses, Sky News reported on Saturday.
Old Mutual CEO Bruce Hemphill said on the company’s website in mid-November that he would examine Old Mutual’s businesses, management and markets over next few months and was meeting “key customers, investors and stakeholders”.
Analysts said such a split up would make sense as Old Mutual, which was founded in 1845 in South Africa before moving to London in 1991, is still a disparate mix of businesses.
Nedbank, which would become the second South African banking group losing a major international shareholder, took the news in its stride and at mid-morning the stock was only 0.38% lower at R189.77, after initially losing 2.5%.
Barclays Africa [JSE:BGA], which lost about 6% last week after Barclays announced its intention to sell its 62.3% stake in the South African group, traded 0.36% higher at R139.50.
Standard Bank [JSE:SBK] and FirstRand were also among the busiest shares. Standard Bank gained 1.89% to R134.30 and FirstRand was 0.35% higher at R48.46.
The rest of the market disappointed after Asian shares hit two-month highs on Monday, extending sharp gains from last week following upbeat US jobs data, a rebound in oil and commodity prices and a flurry of reassurances from Chinese leaders that the economy would remain on a sound footing.
US nonfarm payrolls grew by 242 000 jobs last month, beating forecasts for 190 000, while the participation rate rose for three months in a row.
The upbeat figures, coming after data last week showing some signs of recovery in the US manufacturing sector, eased worries that the US economy could be slipping into recession under the weight of low oil prices and a stronger dollar.
Although the Resources index was lower, Anglo American continued its recovery and gained another 4.6% to R129.11. Glencore [JSE:GLN] was 1.95% higher at R34.75, but BHP Billiton [JSE:BIL] gained only 0.10% to R86.88.
Two resources shares, which were at 52-week lows a couple of weeks ago, traded at new 52-week highs on Monday. Assore [JSE:ASR], which was on a low of R56 on January 12, reached a new high of R156.99 on Monday. That means the share is 87.8% higher over the past 90 days.
Anglo American Platinum [JSE:AMS] reached a low of R165.08 on December 20, but traded at a new high R396.86 on Monday after gaining 1.26%.