Frustration reigns on JSE as technology fails brokers and clients
JET 2, the upgraded Johannesburg Equities Trading computer system, crashed abysmally this week, leaving brokers and clients frustrated at lost opportunity.
Jet 2 is intended to standardise the tick size to 1c - theoretically to improve liquidity but technically making possible a bid of for example R140,01 for De Beers to facilitate bookovers. Thursday's reinstallation of Jet 1 resulted in dealers trying to make up for lost time and volumes soared. But it was an unhappy week, "one of the worst in the JSE's history", according to one dealer.
A late rally on Friday afternoon lifted indices from the doldrums. The industrial index added a net 46 points to 7 998, but the all-share index shed 13 points to 6 714 on the back of an 8% dive in the gold index to 1 524 points. Gold trawled the depths of $372/oz, and the rand firmed to as much as 456c to the dollar, resulting in a double negative on the rand price of gold, albeit still a healthy R54 500/kg.
Diamond miners struck lucky. Benguela Concessions, which succeeded in an appeal court ruling after a four-year legal dispute involving $72-million with Namco, added 51c to 335c after the finding. Ocean Diamond Mining put on 45c to 540c on improved results and Trans Hex added 60c to R35,60. Positive comments from De Beers chairman Julian Ogilvie Thompson on diamond sales and prospects lifted the bellwether counter 425c to R140,75.
Better than expected results from Anglo American, which raised earnings 22% to 1 045c a share in the six months to September, added 275c to the Anglo share price. It closed at R262,50. JCI, in which 34,9% will be bought from Anglo by a Capital Alliance-led consortium at R54,50, shed 5c to R47. It was closer to R50 when the deal was announced late on Tuesday afternoon. Capital Alliance added 110c to R24,50; shareholders Saflife and HCI also firmed.
Cautionary announcements were common - indeed the purpose of cautionaries came under scrutiny as many companies warned of negotiations that could affect the share price, among them Johnnic, Omni Media, Times Media, Ventel, SA Druggists, PAG, Harveys Curnow, Samgro, Boland, Amlac Shoredits, Sentrachem and RMB Holdings. Omnia added 130c to R14,60 after telling shareholders of a "substantial improvement in earnings for the first 10 months of 1996 and a 27c dividend. But in the same sector Sentrachem shed 313c to 952c after telling its members of the very opposite trend: forex losses incurred in subsidiary Sanachem will hammer performance. The announcement shocked analysts, who were aware of a forex problem but had been reassured over the magnitude by management.
Presmed touched 950c, closing 10c up at 900c after a deal with Lifecare which results in Presmed's becoming a substantial force with 18 private hospitals, 14 day-care clinics 2 100 beds and 101 operating theatres, turnover of R320-million, profits of R29,3-million and tangible net assets of R214-million. Presmed paid R105-million for Lifecare settled through the issue of 15-million ordinaries at 700c.