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JSE subdued as market awaits mini budget

Johannesburg - MTN [JSE:MTN] was one of the few major shares on the JSE to make any significant moves on Tuesday, as the market went into limbo in anticipation of the mini budget speech in Parliament on Wednesday.

The share gained almost 2.5% in early trade on Tuesday, after a trading report for the third quarter gave further firm indications that the mobile operator's operations in Nigeria are improving strongly after recent problems.

The rest of the market was however subdued and the major indices hardly moved in the first hour of trade. The All-share index lost 0.20% to 57 886 points by mid-morning and the Top 40 index shed 0.21% to 51 556 points, after the Industrial and Financial indices also lost ground. The Industrial index was 0.21% softer and the Financial index 0.31% down.

The Resources index was 0.13% lower, despite a fairly soft rand which traded at R12.73 to the dollar.

There are fears are that the mini budget will reveal information about the government’s budget shortfall which could force the rating agencies to downgrade the country’s foreign credit rating even further.

There was however firm interest in MTN in early trade, after the group said MTN Nigeria reported an 11.2% increase in total revenue supported by data revenue growth of 72.1%.

This happened despite a marginal decline in group subscribers as the group continued to refine its active subscribers, and as 750 000 subscribers in Uganda were disconnected to meet regulatory requirements.

At mid-morning the share price was 1.26% higher at R128.40, but it shot up in early trade to R129.95 - 2.45% higher than the previous day’s close. MTN was one of the busiest shares on the JSE but the volumes were modest in line with the rest of the market.

The group’s total revenue fell by 13.4% largely due to exchange rate movements, but on a constant currency base total revenue increased by 6.9%. Voice traffic (billable minutes) increased by 9% and data traffic grow by 125% year-on-year.

Although MTN’s share price was only 0.5% higher for the year to date before Tuesday’s trade after a turbulent year, it made some steady progress lately, gaining almost 15% over the previous 90 days and 4.84% over the past 30 days.

Some of the other dual-listed shares hardly moved. Naspers [JSE:NPN] was only 0.10% higher at R3 277.02 and Steinhoff [JSE:SHF] traded only 0.05% higher at R61.19. Richemont [JSE:CFR] lost only 0.08% to R123.23.

British American Tobacco [JSE:BTI] moved more decisively and traded 0.76% lower at R876.91.

Anglo American [JSE:AGL] reported a 6% rise in output for the third quarter, but the share price was only 0.28% higher at R262.56. BHP Billiton [JSE:BIL] was also only 0.02% stronger at R249.85.

The company said however that platinum production would be lower in future following the closure of unprofitable production at the Bokoni mine, which was placed on care and maintenance in the quarter.

Anglo said it had removed unprofitable ounces from its platinum mine, but Anglo American Platinum [JSE:AMS] traded 0.15% lower at R367.35. Impala Platinum [JSE:IMP] was 0.25% softer at R32.20.

Lonmin [JSE:LON] was however 1.29% higher at R16.50, after it was learned on Monday that the group plans to cut more than 1 000 jobs before Christmas because of persistently low commodity prices and rising costs.

Anglo American also announced a planned increase in iron ore production, which gave Kumba’s [JSE:KIO] share price another big push. The iron ore producer gained 2.32% to another 52-week high of R280.72 after it lifted almost 90% over the previous 90 days and 27.5% over the previous 30 days.


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