JSE slips as rand gives up gains
February 22, 2008
stocks fell on Friday led lower by heavyweight mining companies,
despite high metals prices, as global equities markets turned negative,
and the rand gave up most of its gains.
The Top-40 index closed down 1.22 percent at 27,603.68 points as the
broader All-share index lost 1.1 percent to 29,848.89 points.
"We followed on from the US, they had a weak day... the sentiment is
also a little bit softer after being up this week," Roy Lamb, a trader
at Investec said.
Mining and index heavyweight Anglo American shed 2.75 percent to 487.58 rand and BHP Billiton lost 1.49 percent to 248.25 rand.
Diverse mining group Exxaro was the biggest loser amongst blue chips,
closing down 5.44 percent at 101.60 rand. Transportation company
Imperial gained the most, ending up 3.81 percent at 81.50 rand.
"Imperial is coming from a very oversold interest ... and also possibly some short covering," Andrew Todd, trader at BoE said.
Platinum powered to an historic high near $2 200 an ounce on Friday as
supply problems dogged top producer South Africa, but erased gains
later on profit taking.
Ferdi Heyneke, portfolio manager at Afrifocus Securities, said he
expected commodities to drop in the coming weeks because of profit
"I think the commodities are probably close to the top," he said. "I'm
surprised we're not down more today," he added, referring to the bourse.
The rand firmed in another volatile session, but gave back most of its
gains against the dollar late in the day, after the the dollar
recovered from a three-week low against the euro.
The local currency was trading at 7.7760 to the dollar at 1547 GMT, 0.3 percent stronger than the close in New York on Thursday.
The rand touched a session high of 7.6850, extending a rebound from
Wednesday's 16-month low of 7.9250 to the greenback, before paring
gains when US stocks turned negative.
It failed to make any headway against a firmer euro.
Analysts said a positive opening on Wall Street boosted the rand as
negative reaction to Finance Minister Trevor Manuel's 2008 budget
subsided and precious metals prices tested new record highs.
The rand slipped sharply after Manuel announced on Wednesday further
relaxation of exchange controls and pushed up forecasts for the current
"There has been a recovery in (global) equity sentiment and I think
people have been squeezed out of their long dollar-rand positions,"
said Lucy Bethell, currency strategist at the Royal Bank of Scotland in
Domestic government bonds slipped late in the session as the rand retreated.
The yield on the 2010 bond was three basis points higher at 9.35
percent compared to Thursday's close, with the 2015 yield up 1.5 basis
points at 8.79 percent.
Reporting by Gordon Bell and Serena Chaudhry; editing by David Christian-Edwards