SA gold stocks take a beating

Johannesburg - The JSE ended in the red on Friday, taking direction from weaker US markets amid profit taking after the market's recent rallies.

By 17:00, the JSE all share index had weakened 0.97%; resources lost 1.68% and gold counters shed 8.19%. However, platinum miners added 2.92%.

Banks were up 1.12% and financials edged up 0.36%, but industrials weakened 0.79%.

The rand was last bid at 9.08 to the dollar, from 9.19 when the JSE closed on Thursday. Gold was quoted at US$905.05/oz a troy ounce from US$899.35/oz at the JSE's last close, and platinum was at US$1 156/oz from its previous close of US$1 153.50/oz.

"There is nothing much happening out there other than profit taking," the trader said.

"We have had some really good runs lately and now people are taking some profits. Volumes are also very high for a Friday today.

"Gold stocks are taking a beating. They have run more on fear than on good fundamentals, and now that confidence is returning to the market people are selling off these shares and realising that there is more value in other stocks.

"The rand is also very strong and of course that is not good for some of the shares. Resources like a weak rand, and the strong rand is limiting moves there," he said.

Dow Jones Newswires reports that US stocks moved lower in morning trading on Friday after a report showing that unemployment in the US surged to a 25-year high.

At the time the JSE closed, the DJIA had weakened 0.60%.

Among equity movers on the JSE, Anglo American (AGL) gained 5.21%, to R186.47 rand but BHP Billiton (BHP) gave up 3.44%, to R195.03.

Anglo American plc earlier announced that it had priced a two-tranche bond offering made to insttutional buyers in the United States and to investors outside the US.

The offering comprises $1.250bn 9.375% senior notes due 2014 and $750m 9.375% senior notes due 2019.

Gold miner AngloGold Ashanti (ANG) lost 9.09% to R293, Gold Fields (GFI) was down 5.70%, to R98.50 and Harmony (HAR) weakened 10.33% to R91.02.

Metorex (MTX) put on 5 cents, or 3.23%, to 1.60 rand. It said earlier that it now owned 87% of Copper Resources Corporation (CRC) after acquiring an additional 247.6 million shares through conversion of its loan.

Investment group Brait (BAT) gave up 3.55%, to R10.60. It earlier advised that for the year ended March 2009, directors estimate that diluted headline earnings per share will decrease by between 37% to 42% compared with a year ago.

Managed telecoms solutions provider Huge Group (HUG) gained 10.66% to 135c. It earlier issued a cautionary advising shareholders that its board is in preliminary discussions regarding the structure, funding and outcome of a transaction that, if proposed, would result in the same offer being made to all shareholders for them to sell, on a voluntary basis, all or some of their shares in the company for a cash price.

- I-Net Bridge