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Johannesburg - Commodity giant Anglo American [JSE:AGL] pulled the JSE to a new 52-week high on Tuesday morning, on the back of good news from some of its subsidiaries.
At mid-morning Anglo American was almost 6% higher after its iron ore subsidiary Kumba Iron Ore [JSE:KIO] gained almost 12% in early trade following an announcement of a sharp jump in first-half profit.
As a result, the Resources index was at that stage already 3.06% higher, enabling the All-share index to gain 0.61% to a new 52-week high of 54 700 points. The Top 40 index was 0.66% higher at 48 378 points, improving on the 52 -week high set on Monday.
The Industrial index was 0.15% softer after a strong run the previous few days, while the Financial index edged 0.36% higher.
The rand traded at R12.97 to the dollar, which must have also helped resources shares, but the driving force was the excellent results produced by Kumba. The company will reinstate dividends for the first time since 2015, after interim profits rose over 50% on stronger iron ore prices and improving margins.
Kumba’s share price, which rose to R195.50 in early trade, at mid-morning was still 10.92% higher at R192.01. Headline earnings increased by 53% to R4.6bn, or R14.42 per share, for the six months to end-June.
Anglo American, which was one of the busiest shares on the JSE with more than 1.4 million shares traded for more than R260bn, at mid-morning was 5.95% firmer at R196.68.
Exxaro [JSE:EXX], which also owns a stake in Kumba, was 4.72% stronger at R389.50.
Anglo American Platinum (Amplats) [JSE:AMS], another Anglo subsidiary, traded 1.80% higher at R310.98. Amplats dropped more than 3% on Monday on news that headline earnings per share fell by 55% to R2.85/share. The drop was mainly due to the strong rand, but the underlying operational picture looks far more promising.
The group has almost completed the sale of unprofitable businesses and now manages a group of businesses that are highly mechanised and located on the right side of the industry cost-curve. The company’s balance sheet is also in a much healthier position.
The other big resources shares also traded higher. BHP [JSE:BIL] at mid-morning was 2.9% higher at R224.05, and Glencore [JSE:GLN] gained 2.08% to R54.05.
Impala Platinum [JSE:IMP], which dropped more than 5% on Monday in sympathy with Amplats, also recovered and at mid-morning was 1.08% higher at R35.64.
Naspers [JSE:NPN] was only 0.11% up, but it was enough for the share price to trade at yet another all-time high of R2 863.26.
Some of the other heavyweights in the industrial sector lost ground. Richemont [JSE:CFR] was 0.56% softer at R108.31 and British American Tobacco [JSE:BTI] lost 1.50% to R90.80.
Sentiment towards Sasol [JSE:SOL] seems to be improving. The share gained 4.72% to R389.50, despite news that headline earnings declined by between 11% and 21% during the 12 months to end-June due to the strong rand. The company said the Secunda synfuels operations increased production by 1% to a record of 7.83 million tons.
Among the banking shares Standard Bank [JSE:SBK] gained 0.37% to R160.54 and is now just below the 52-week high of R161.89. FirstRand [JSE:FSR] was 0.52% higher at R52.41.
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