Platinum shines as JSE loses ground after promising start

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Johannesburg – Platinum shares were the stars on the JSE on Tuesday, as the market continued to drift sideways amid uncertainties about the South African economy’s prospects.

Impala Platinum [JSE:IMP], Anglo American Platinum (Amplats) [JSE:AMS] and Lonmin [JSE:LON] were among the few major shares which made big advances as the market again lost momentum after a promising start.

Platinum shares have been among the frontrunners over the past week, and a strong production report from Impala gave these shares another push.

Thanks mainly to platinum shares and some gold shares, the Resources index was one of only a few major indices in the black by mid-morning. The Resources index traded 0.36% higher, while the Platinum index gained 1.43% and the Gold index 0.91%.

The result was that the All-share index was only 0.10% higher at 58 928 points by mid-morning, while the Top 40 index gained only 0.09% to 52 525 points. The Industrial index was only 0.04% higher and the Financial index lost 0.08.

These modest gains were however enough to push the All-share, Top 40 and Industrial indices to new all-time highs.

The rand remained relatively weak at R14.04 to the dollar, but it did not do much for the dual-listed shares on the JSE. This is because investors are waiting to see what will happen to South Africa’s credit rating next month, after the mini budget painted a bleak picture of government finances.

There is however life in platinum shares, and Impala was at one stage more than 5% higher at R20.09. By mid-morning the share traded 3% higher at R39.14 after reaching as high as R40.09.

Impala has had a rough year and is still more than 11% lower for the year to date, but the share gained more than 16% over the past seven days, after news that it reached an agreement that will give it control of a major new platinum project in the Waterberg region.

The group on Tuesday said that tonnes milled during the second quarter increased by 9.6% to 6 741 00 tons.  Platinum in concentrate produced during the quarter across all mining operations increased by 6.7% to 349 000 ounces.

Lonmin, which was also in the doldrums earlier in the year, gained 3.83% to R19.25 and earlier traded more than 5% higher at R20.09.

Lonmin is still more than 20% lower for the year to date after reaching a low of R10.29 as recently as July, but is now on a spectacular recovery trail after an agreement with its banks to give it more operational options.

The share gained more than 17% over the past seven days, more than 43% over the past 30 days and more than 74% over the past 90 days.

Amplats breached the R400 level on Tuesday and at mid-morning was 2.53% higher on a new 52-week high of R402.00. It earlier traded as high as R409.00 – a gain of more than 4%.

Amplats made steady progress this year and is now more than 48% higher for the year to date, supported by the palladium price which is still close to $1 000/oz.

Among the commodity giants, BHP [JSE:BIL] traded 0.84% higher at R255.14 and Anglo American [JSE:AGL] gained 0.41% to R262.74. Glencore [JSE:GLN] shed 0.10% to R68.18.

The major industrial shares delivered a mixed bag. Naspers [JSE:NPN] lifted 0.37% to a new all-time high of R3 463.88. Richemont [JSE:CFR] was 0.46% higher at R130.00, just below its all-time high of R130.32.

British American Tobacco [JSE:BTI] gave up 0.55% to trade at R912.19 and Steinhoff [JSE:SHF] was 0.29% softer at R61.77.

The Foschini group [JSE:TFG] was one of the busiest shares on the JSE in terms of value and traded 1.41% higher at R136.77. Mr Price [JSE:MRP] was also busy but lost 0.36% to R175.42. 

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