Share

SA mining stocks gains most in 6 weeks

Johannesburg - South African mining stocks gained the most in six weeks as a slump in the dollar made commodities priced in the US currency more attractive to investors.

The rally may not last as fundamentals for producers, such as supply and demand and the cost of operations, haven’t yet shown signs of improvement, according to analysts at Vunani Securities and Momentum SP Reid Securities in Johannesburg.

“The most important driver at the moment is the dollar that’s slightly weaker and that has provided support to all commodity prices,” said Hurbey Geldenhuys, a mining analyst at Vunani Securities. “One should still be cautious. Many of the fundamentals haven’t shifted.”

The 16-member FTSE/JSE Africa Mining Index advanced as much as 7.5%, the most since December 23, and the highest level since November.

African Rainbow Minerals [JSE:ARI] led the gains, soaring as much as 27%, the most on record. Platinum producers Lonmin and Impala Platinum Holding jumped 15% and Anglo American rose 13.

South Africa’s currency was 0.3% weaker against the US dollar at 15.9727 at 11:41. The Bloomberg Commodity Index, which tracks the prices of a basket of minerals, climbed a second day, adding 0.6%. Gold for immediate delivery rose 0.3% to $1 145.71 an ounce while platinum gained 1% to $888.05 an ounce.

Harmony Gold Mining [JSE:HAR], the best-performing stock on Johannesburg’s benchmark index this year, gained 13%. The gold producer, which has more than doubled in 2016, said it is seeking to make acquisitions and repay debt after a plunge in the rand bolstered profit margins in the second quarter.

Gold priced in rand has climbed 19% since December 1 and traded at 18 329 rand ($1 145) an ounce at 10:58 a.m. in Johannesburg.

Metals, and the companies that produce them, have slumped as a slowdown in China, the biggest consumer, led to oversupplies. The collapse in commodity prices has left many companies in the industry trading at all-time lows and with increased volatility.

“Your view on commodity prices is going to determine when you would begin piling into resources and right now the outlook is still uncertain,” Stephen Meintjes, head of research at Momentum SP Reid Securities, said by phone from Johannesburg.

“It’s uncertain enough for caution to still be warranted.”

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.99
-0.3%
Rand - Pound
24.14
-0.1%
Rand - Euro
20.64
-0.2%
Rand - Aus dollar
12.39
+0.3%
Rand - Yen
0.13
+0.5%
Platinum
913.65
-1.1%
Palladium
1,016.50
-4.6%
Gold
2,158.56
-0.1%
Silver
24.98
-0.2%
Brent Crude
86.89
+1.8%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders