Johannesburg - The JSE opened Wednesday’s session in the black with industrial stocks making the biggest gains‚ while platinum was down on potential further labour problems in the near future.
Retailers regained their composure after Woolworths Holdings (WHL) announced a solid trading update on Wednesday morning.
The sector took a big hit on Tuesday due to lower than expected earnings fears therein.
At 9.42am‚ the all share index was up 0.21% to 39‚994.93 points‚ with the top 40 index adding 0.18% to 35‚573.63 points‚ while the platinum index shed 0.87% and retailers added 1.03%.
In the east the Japanese Nikkei 225 closed down 2.01%‚ while the Hong Kong Hang Seng Index had dipped 0.41% by 9.27am local time.
Locally Anglo American Platinum’s (AMS) restructuring announcement on Tuesday will lead to the loss of 400‚000oz of targeted production.
“The effect will be offset by the higher platinum price so the net export revenue loss to the country could be around R3bn as opposed to the full R6bn. This is huge. However‚ the real worry is that the restructuring presages another round of labour problems and is a signal of mounting problems in the industry and the economy‚” Rand Merchant Bank said in a morning note.
“Amplats announced that it will be indefinitely closing four shafts for maintenance work at its Rustenburg mine. Harmony Gold also reported that it will be suspending production at one of its mines due to violent strike action that broke out late last year. This suggests that growth in the mining sector will remain weak this year even taking into account any technical rebound in output‚” RMB said.
“It is estimated that Amplats’ planned restructuring will lead to 14‚000 job cuts. This has not been taken well by the government‚ with the mineral resources minister being very vocal with her criticism of Amplats’ plans. The minister has reportedly threatened Amplats with fines and the ANC has called for mining licenses to be revoked‚” the bank said.
Locally December PMI and November retail sales are due for release later today.
On the JSE Anglo American (AGL) was down 1.59% to R271.02‚ while its rival BHP Billiton (BIL) added 0.63% to R293.94.
Anglo American Platinum (AMS) shed 2.88% to R472.97‚ while Aquarius (AQP) added 5.53% to R10.50.
In the retail space Woolies (WHL) jumped by 3.32% to R65.60 after the company said on Wednesday that its group sales for the first 26 weeks of the June 2013 financial year increased by 18% over the comparable period last year.
The Foschini Group (TFG) added 0.80% to R125.39 and Shoprite (SHP) was up 0.77% to R184.21. - I-Net Bridge