Greenspan's barbed message hits markets across the world
AMERICAN Federal Reserve Bank governor Alan Greenspan's comments that the economic outlook was uncertain despite stable inflation, had big repercussions on global equity markets.
Bourse after bourse closed substantially lower - 3% and more in most cases - and the JSE was no exception. The all-share index gave up 1,7% to 6 601 as the industrial index shed 2,5% to 7 795. Volume was high a week ahead of the futures closeout.
The only positive outcome from the chaos was a minor uptick in the gold price. Gold had continued weaker on speculation of sales by a European central bank; none admitted to as much. Minister of Finance Trevor Manuel's comments that the gold market is a scary place underlined the sentiment.
The gold index dropped as low as 1 492 points before picking up to as high as 1 553 on Friday on the back of a near $5-dollar climb in gold to $373/oz. Nevertheless, golds retreated and the index closed at 1 528. The rand slipped to 466c on dollar strength.
RMP Properties and Barprop announced they are to be rationalised and the gold recovery business either sold or listed separately. Randgold is said to be interested, as well as in tying up loose exploration ends with Randex. Randgold added 120c to R34,25, Barprop 26c to 216c, but RMP was bid 30c off at R23,70.
Building and construction counters split into two opposite camps. Stocks & Stocks jumped on Friday on two counts: it announced the possible separate listing of its hotels interests, and it was part of the Trans African Concessionaires consortium which was awarded the R3,5-billion N4 Maputo Corridor upgrading project. Another member, Basil Read, climbed 20c to 204c.
But Grinacon, which was unbundled out of Grinaker and listed on Monday on tiny trade as high as R12, had retreated to R10 by the end of the week: Grinacon is in the unsuccessful Via Do Sol consortium which was shortlisted for the N4 contract. Ditto Group Five, down 100c to 700c.
Richemont's sterling earnings eased 6% and the share price dropped from last week's peak of R73 to R64,50.
Boland secured a call option to buy 18-million NBS shares from RMB Holdings between R70 to R80,04. RMBH has a put option to sell at R80,04. NBS added 175c to R65,25 and Boland 75c to R46,75. RMBH has bought the outstanding 50% of Aegis from NBS for R125-million. Boland already owns 5-million NBS shares and will have 25,6% if the option is exercised.
Coronation surged in a broadly weaker banking sector. An exchange of 100 shares took place at R60. The share closed at R55.
Holder of 100 Seeff now worth R154 will be offered 4,138 Capital Alliance shares and 3,2513 Saflife, worth R168, following the sale of assets by Seeff. Seeff's share price shed 20c to 154c, Captall 250c to R22 and Saflife 220c to R23,70.
Control Instruments issued shares at 350c for the R18,25-million acquisition of Rhomberg Bräsler. Control was below 300c early in the week, climbing 10% to 330c on Thursday.
Seardel added 11% to 180c after a positive press report. But stores suffered badly. Pep gave up 155c to R15,95, Foschini 485c to R14,40 and McCarthy 155c to R14,65.