The JSE Securities Exchange (JSE) ended on a sombre note on Friday after news that a lawsuit claiming reparations for apartheid victims had been filed against London-listed resources group Anglo American – the heaviest weighted stock on the bourse – cast a cloud over the market.
The JSE Securities Exchange (JSE) ended on a sombre note on Friday after news that a lawsuit claiming reparations for apartheid victims had been filed against London-listed resources group Anglo American – the heaviest weighted stock on the bourse – cast a cloud over the market.
However, industrials and financials still managed to eke out gains on the back of stronger world markets. Strong rallies on Tuesday and Wednesday ensured that the all share index was up almost 2% for the week, despite Friday’s fall.
At the close, the all share index was 0.55% weaker. Resources retreated 1.65% on the day, while the gold and platinum mining indices lost 0.63% and 2.91% respectively. The industrial index inched up 0.32%. Financials were 0.47% firmer, while the banks index ended 0.20% in the black.
The rand was trading at 7.9590 to the dollar from 7.9250 when the JSE closed on Thursday, while gold was quoted at $323.50 an ounce from $325.40/oz at the JSE’s last close.
A dealer said that the lawsuit against Anglo was definitely the day’s main feature.
“The story has been doing the rounds, but when a headline is put to it, it scratches old wounds. It is a big story that one can’t dismiss – these lawyers were successful in suing Swiss banks (on behalf of Holocaust victims),” he asserted.
According to a newswire report released on Friday afternoon, US lawyer Ed Fagan, in co-operation with South African attorneys, had filed on $6.1bn against Anglo and diamond giant De Beers, in which Anglo has a 45% stake.
Anglo shares closed 3.21% or R3.89 in the red at R117.11.
The impact on the bourse can be seen by the fact that the all share index only closed 43.67 points weaker, while Anglo’s negative effect on the index was 42.38 points, I-Net data shows.
Anglo responded in an announcement to the market that it strongly rejected the efforts made by US lawyers and others to use US courts to resolve important issues for South Africa’s future.
The next biggest drag on the JSE on Friday was synthetic fuels group Sasol, which slipped 1.78% or R1.60 to close at R88.50.
AngloPlat was under pressure on the back of a softer platinum price, plunging 4.52% or R10.99 to R232.00.
The dealer said that while resources stocks had opened lower due to profit taking, the Anglo story had added to the downward momentum.
“It could have created a bit of a scare – if Anglo and De Beers can be nailed because of the migrant labour system, then why not the other companies in the sector?” he asked.
Despite the weakness in resources, the picture on the JSE was not entirely one of doom and gloom.
“There was a positive undertone, if you look hard enough. Some of the industrials, which started bouncing this week, managed to stay with the momentum. With financials it is a similar story,” the dealer emphasised.
Industrials to enjoy strong performances included London-listed beverages group SABMiller, which climbed 1.44% or 74c to R52.00. Packaging group Nampak soared 2.10% or 25c to R12.15, while retailer Woolworths was up 4.21% or 20c at R4.95.
“The most spectacular recovery in financials was from the Investec,” the dealer commented.
Both Investec Plc and Investec Ltd are up over 11% since Tuesday.
On Friday, Investec Plc closed 3.65% or R2.99 stronger at R85.00. Investec Ltd, which was also at R85.00, was up 4.94% or R4 at R85.00.
Overall, advancers outnumbered decliners on the all share index by 67 to 42, but decliners prevailed due to their heavy weight.
