Group Five tumbles 17.4% but gold shares advance

STOCKS edged lower yesterday as sharp losses in construction and engineering firm Group Five were offset by a strong performance by gold producers taking advantage of better bullion prices.

The Top40 index ended down 0.23 percent at 45 031.48. The broad all share index slipped 0.17 percent to 50 511.52.

Shares of Group Five dropped 17.4 percent to R28.91, its biggest daily decline in 14 years, after it said first-half profits would fall by more than 20 percent, due to poor performance in its engineering and construction operations.

The company said its civil engineering business had been hit by operational difficulties at a project it did not identify.

Farai Mapfinya, the head of equities at JM Busha Investment Group, which owns shares in Group Five, said: “We don’t see any material recovery in terms of the engineering and construction unit and also on the civil engineering side. It’s a tough environment.”

Africa’s largest gold producer, AngloGold Ashanti, and

7% A share price jump by AngloGold Ashanti

Harmony Gold were the biggest winners on the JSE, recording gains on the back of stronger bullion prices.

AngloGold jumped 7 percent to close at R103 and shares in Harmony Gold rose almost 6 percent to close at R17.95.

Barloworld also advanced, by 2.2 percent, the most since October, and closed at R100.90 yesterday. Decliners included African

Oxygen which dropped 1.59 percent for the first day in five to close at R19.16 yesterday.

Naspers fell 3.57 percent for the first time in three days after reaching a record on Friday. The share price closed at R1 502.61 yesterday.

Trade was more subdued with 166 million shares changing hands compared with last year’s daily average of 176 million.