JOHANNESBURG – Mining stocks closed yesterday's trading session deep in the black, taking advantage of the weak rand battered by Brexit uncertainty and the continuing strain in relations between the US and China.
The gold mining index surged 4percent on the local bourse as a slide in global shares pushed investors to seek shelter in bullion.
Sibanye Gold went up 5.49percent to R9.99, while peers AngloGold Ashanti surged 5.29percent to R161.54 and Harmony inched up 2.21percent to R23.62.
Other mining stocks also saw gains with Impala Platinum closing the session 6.51percent up at R37.28, while Eastern Platinum went up 3.7percent to R1.40 and Anglo American Platinum inched up 2.71percent to R496.47.
However, the gold mining stocks were the only ones to close the session in the black as the JSE all share index plummeted 1.18percent to 50434 points, with the blue-chip Top 40 index closed 1.31percent in the red at 44418points.
Izak Odendaal, an investment strategist at Old Mutual Multi-Managers, said the JSE was ending the year on a sour note.
“Last week, the index fell to a level it first reached in July 2014, meaning that the only returns over this four-year period came from dividends,” Odendaal said.
“This has been painful for our investors. However, many decades of stock-market history here and abroad suggest that such periods of weak performance are followed by periods of strong performance.”
The financial index slid 1.38percent, while the industrials index closed the day 1.77percent lower. Bourse heavyweight Naspers was 2.27percent down at R2750.
Nkareng Mpobane, the chief investment officer at Ashburton Investments, said that Naspers lost about a fifth of its value since the beginning of the year and even the popular property sector fell by a similar amount.
“As it stands, foreigners have been net sellers of South African equities since 2015 and turned net sellers of our bond markets in 2018 on a year-to-date basis,” Mpobane said.
“This compares to an emerging market peer group that has enjoyed net inflows in equities over recent years, with net outflows being recorded in 2018 for the first time in over four years.”
The all-share index has been in a free fall since January when it reached a record high of 61684 points as a Ramaphoria wave swept through the markets.
The rand also tanked by 1.04percent to R14.34 against the dollar by 5 pm, against the R14.16 it was bid at on Friday. The local currency was weighed down by jitters over global growth.
British Prime Minister Theresa May postponed the final vote on her Brexit deal after it became clear that she does not have enough votes to get the unpopular EU withdrawal agreement through the House of Commons.