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Johannesburg - Profit-taking was again the order of the day on the JSE on Thursday morning, and it seems if the recent run has come to a standstill as all the major indices traded lower by midday.
By midday the All-share index was 0.80% softer at 52 175 points and the Top 40 index treaded 0.77% lower at 46 900 points, below important resistance levels.
All the other major indices were lower, with the Resources index losing 2.53%, the Financial index 1.33% and even the Industrial index 0.43% down.
There were individual shares which performed spectacularly in response to good results, but generally the market was lower with icons such as Anglo American [JSE:AGL] and BHP Billiton [JSE:BIL] again reaching new 52-week lows. BHP Billiton now trades at below R200 a share while Anglo American is on the verge of dipping below R100/share.
The technical analysts at Imara SP Reid said in their daily Market Snapshot on Thursday that the near-term technical picture of the All-share index continues to gradually deteriorate, suggesting that early bargain-hunting should be avoided as further drops to below the 200-day moving average again remain a realistic trading outcome. The Top 40 index is already below the important resistance level of 47 200 points.
The All-share index had already lost 2.74% over the past seven days before Thursday’s trading started. The gain over the past three months is now 5.9% after being more than 8% higher.
There were however highlights, with Sappi [JSE:SAP] gaining 11.1% to R57.90 after the world’s biggest producer of dissolving wood pulp said full-year profit rose 24% after the company reduced financing costs and prices for its cotton substitute rose. By midday the share traded at R59.80.
Investors have been discounting improved results by Sappi over the past month already, and the share price is 24.9% higher than 30 days ago.
Mediclinic International, South Africa’s largest private hospital owner, announced strong results but the share price did not respond. By midday it was 1.56% softer at R117.64, although first-half profit increased 12% as the Swiss and Middle East units grew and the company benefited from converting earnings in those regions into rand.
READ: Overseas expansion a boost for Mediclinic
Last month Mediclinic agreed to combine with Al Noor to create the biggest private healthcare provider in the United Arab Emirates. The £1.5bn transaction would involve a reverse takeover which gives Mediclinic shareholders a majority stake in the combined operations and a listing on the London Stock Exchange.
READ: Mediclinic, Al Noor Hospitals to combine in reverse takeover
Two of the biggest shares on the JSE also reached new highs. Naspers [JSE:NPN] was 1% higher at R241.28. Before Thursday’s trading the share price had gained 19.5% over the past 30 days.
SABMiller [JSE:SAB] also traded 0.43% higher at a new high of R874.00, although initial trade in the share was less lively than before. Some analysts expect investors will soon start selling the stock after the world's biggest brewer Anheuser-Busch InBev made a formal offer of £44/share for SABMiller on Wednesday, which was accepted. Analysts said the price of the offer is already fully discounted in the share price.
The big conglomerates in the commodity sector, BHP Billiton [JSE:BIL], Anglo American and Glencore [JSE:GLN], which have all lost more 10% over the past seven days, were again all substantially lower.
BHP Billiton fell to below R200/share when it lost 2.54% to reach a new 52-week low of R194.71. Anglo American is on the verge of sinking below R100/share after losing another 4.82% to R101.01. Glencore was 6.21% softer at R21.00.
Lonmin [JSE:LON], which has lost more than 60% over the past 30 days, fell another 5.5% to only R2.06 a share.
MTN [JSE:MTN] was also lower again and fell 2.4% to R147.84. The share has now lost 30.3% over the past 30 days in response to the $5.2bn fine slapped on it by the Nigerian authorities for not discontinuing services to 5 million of unregistered SIM card holders.
