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Johannesburg - The JSE on Wednesday morning was again focused on an international share transaction involving a JSE-listed company, as investors are treading water after the previous week's strong gains.
After a sharp rise in SABMiller’s [JSE:SAB] share price enabled the JSE to close slightly higher on Tuesday night, attention on Wednesday morning turned to Mediclinic International [JSE:MDC] which announced plans to join forces with the Al Noor Hosital Group to create a hospital company with operations in the Gulf states, South Africa and Switzerland.
Nothing much happened on the rest of the market and by midday the All-share index was only 0.22% higher at 53 181 points, with the Top 40 index trading only 0.20% higher at 47 738 points.
The Industrial index was again supported by another rise in the SABMiller share price moving 0.40% higher, but the Financial index lost 0.17% and the Resources index was 0.11% down. By midday the volatile Gold index was 1.77% weaker.
Imara SP Reid said in its daily Market Snapshot that the very short-term picture for the JSE still indicates a market which is substantially overbought for the moment. The overall tone hints strongly at residual selling pressure at higher price levels.
More disappointing data on the Chinese economy also spoilt the mood somewhat. Concerns over China and its effect on the global economy broke a seven-day winning streak on Wall Street on Tuesday, and on Wednesday the Asian markets were also largely declining.
The market was upset by a bigger than expected drop in the Chinese production price index, which has now been on the decline for 43 months.
The JSE on Wednesday morning focused on the healtcare sector with the two big hospital groups Mediclinic International and Netcare [JSE:NTC] among the busies shares on the market.
Al Noor will buy Mediclinic in a reverse takeover that will create the biggest private healthcare provider in the United Arab Emirates, with operations in Dubai and Abu Dhabi.
READ: Mediclinic, Al Noor Hospitals to combine in reverse takeover
The transaction will result in Mediclinic shareholders owning 84% to 93% of the combined business, which will be named Mediclinic International and list on the London Stock Exchange. The company will also have a secondary listing in Johannesburg, and may trade on the Namibian Stock Exchange.
Al Noor rallied 10% to 1 097 pence in early London trading. Mediclinic climbed 5.5%, the biggest increase since February 12, to R123.65 in early trade. By midday the share price was only 1.96% higher at R119.52. Mediclinic has gained 13.7% over the past month.
Netcare was at midday the busiest share on the JSE in terms of volume, but the share price was only 0.26% higher at R37.86.
There was still a big demand for SABMiller shares after the company decided to accept an offer from Anheuser-Busch Inbev, the world’s biggest brewery, for R1.4trn.
The share price, which gained 32% over the past 30 days since the news of a possible takeover became known, traded another 1.49% higher on a new high of R817.00. More than 1.29 million shares were sold for more than R1.95bn.
Some of the other heavyweights in the industrial sector did not move much. Naspers [JSE:NPN] lost only 0.30% to R1 893.97 and Richemont [JSE:CFR] was only 0.35% higher at R115.48.
Sasol [JSE:SOL] lost 1.89 to R438.45 as the price of Brent crude trade again fell below the level of $50 per barrel at $49.10.
In the resources sector BHP Billiton [JSE:BIL] was only 0.14% higher at R238.60 but Anglo American [JSE:AGL] gained 0.90% to R139.40.
South African money manager Sygnia [JSE:SYG] made a strong debut in the financial sector.
READ: Money manager blossoms on JSE debut
The share price at midday traded at R14.75, which is more than 70% higher than the issue price of R8.40. The Cape Town-based company sold 31.2 million shares to selected investors in a private placement before Wednesday’s listing to raise R262m to increase regulatory capital, develop systems, conduct marketing and research and expand.
