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Cuts in interest rates add some spice to... Bond rates fall, whetting appetites for ...
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Cuts in interest rates add some spice to lacklustre marketsINTEREST-rate cuts both domestic and abroad served to renew market spirits and the JSE all-share index picked up more than 12% to 5 625. Almost half of this rise came on Friday alone when the repo rate was cut another 25 points to 21.605% on top of a similar cut earlier in the week. The JSE's turnover topped R2.14-billion. There cuts were given a mixed reception - many deemed them too small, others wondered just how buoyant the equity market could be if there were a whole percentage-point lowering. But when commercial banks responded with prime cuts, the market made hay. Financials especially jumped on Friday, the index climbing by almost 8% to reach 8 848. Among the big climbers was FirstRand, up from 519c to 711c on the week. Theta rose 27% to R21.85 as more than a million shares traded on Friday, and PSL climbed from 224c on Monday to 260c; PSL announced a R492-million rights offer 75/100 at 200c. Creditsure bought FEB Investments for R125-million settled partly in scrip at 300c; the share price added 27c to 195c. The gold price was steady, not straying far below $300/oz. The all-gold index weakened 11% partly on a stronger rand, which was as firm as 565c to the dollar before easing towards 569c against last week's 579c. Three information technology companies announced acquisitions in the United Kingdom. Usko paid £10.8-million for Bytes Technologies, Datatec paid £8.5-million for Network SI, and Set Point Holdings £7-million for Measurement Techniques, mainly in cash plus shares at 350c. Usko enjoyed the biggest percentage rise, adding 30% to 310c. Datatec rose 5% to R58 and Sethold 17% to 380c. Impotek recovered nicely, rising by a third to 430c, and CCHold picked up 40% to R24.35 on new business in the Cape. But investors were fairly cautious of what was once the darling sector: Didata added 5% to R24 and PQ Holdings 3% to R47.50. Punters are worried that slower global economic activity will reduce earnings potential. EL Bateman, Batepro and Batecor abandoned plans to reintegrate. Batepro shed a net 30c to 210c and Batecor 1c to 26c - the pair had been much firmer earlier on hopes that EL Bateman would pay generously to take minorities out. ELB also slipped 15c to 480c, but recovered to 500c. Vesta Technologies, issued at 100c, traded at 120c, warning of negotiations. But window-dressing was evident with Pentacom, the other new listing pitched at 50c. A deal of only 100 shares a moment before the market closed took the price from the mean of 51c to 60c. Retailers fared better than the big drops in their share prices would indicate. There were good results from Wetherlys, New Clicks, LA Retail and Pick n' Pay, which added 36% to 530c. But the reporting periods did not cover the worst of the rise in interest rates. Rebhold issued a cautionary; talk is of a deal with Tiger Oats.
Julie Walker
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