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A blast a day turns the Buffels team... Gold shares battle against bad bad news ... |
Gold shares battle against bad bad news in bearish marketEVEN though everybody was expecting a rise in interest rates, the 1% hike to a prime rate of 20,25% on Wednesday still seemed to catch the market by surprise and the leading indices shed a good 100 points apiece in a week when foreign bourses hit new highs. Over the week, the all-share index came off 1,7% to 6 727 points on the back of a 96-point fall in the industrial index to 7 952 and a 60-point drop in the all-gold index to 1 661. The gold price hit a year's low of $377/oz as shares struggled. "People were panicked into selling at any hint of bad news,'' says one dealer. Market leader Vaal Reefs gave up R11 to R349 but rallied 300c, Driefontein lost a net 350c to R57 and Western Areas 425c to R69,25. Holding company Randgold gave up 475c to R33,25 after showing strength in the previous week. Bellwether De Beers gave up 600c to R136,50, setting the tone for the rest of the market. Mining exploration eased in sympathy, except Energy Africa, which added 70c to R15,50. SouthWits was suspended at 20c by the JSE pending clarification of certain aspects disclosed in the rights offer circular issued a fortnight ago. The interest-rate hike helped the rand a touch firmer; it peaked at 457,90c to the dollar before closing around 462c. First National Bank shed a rand to R22,20, as did Nedcor to R66. NBS and Stanbic also eased, but Absa, whose book seems better suited to higher interest rates, firmed 60c to R23,10. But in the same sector, Gensec hit R40 after climbing from R35,60, and Coronation went as high as R53, closing 75c up at R52,25. Prestasi, in which Coronation has taken a stake, jumped by half to 180c, ending at 172c on a cautionary announcement. It is holding a rights issue at 105c underwritten by Coronation. Leading lights in the electronics sector continued to soar. Didata - number one performer in the Business Times Top 100 tables over five years - gained 80c to R13,30, Persetel 100c to R31 and Datatec 70c to R14,50. New listing OTK had a bumper day on Wednesday when 5,8-million shares traded. The next day, NSA announced it had become the biggest shareholder with 43-million shares bought at an average of 420c. OTK closed at 485c, but NSA gave up 70c to R15. King Foods added 12c to 148c on the R4,6-million purchase of Bimbo's with 34 outlets. Servgro added 80c to R23,30 on the announcement that it is considering a listing for subsidiary Avis. It recently unbundled Forbes Financial Services. Micor was strong on a cautionary, adding 100c to 430c. Many quality shares look oversold. Liberty Life is only R119 (R142 in June), M-Net 450c (600c in February), SA Breweries R116,50 (R145 in January), City Lodge R26,10 R38 in February) and Bidvest R24 (R29,75 in June). Daewoo lost another 45c to 300c. Engineering shares have been hammered. T&N has lost two thirds of its value since May to 970c this week, NEI Africa is down 720c to R18,80 in the same period and the luckless Howden, listed in May, is down from 510c to 390c. But Primedia was strong, adding 170c to R19,50, and SFW picked up 80c to R11. Entertainment commands a premium. Julie Walker
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