Strike fears weigh on JSE
THE JSE closed slightly lower on Friday as expectations of industrial action in the gold sector this week weighed on local sentiment. At 5pm‚ the all share inched down 0.05% to 42‚994.92 points with the top 40 index down 0.06%.
Gold miners fared worst‚ dropping 2.38% on expectations the National Union of Mineworkers would issue gold companies with a notice to strike today, with production stoppages seen likely to occur from Wednesday.
“Three different sectors, which contribute a large chuck to SA’s gross domestic product are expected to be on strike, which is putting pressure on sentiment,” Vunani Private Client’s Viv Govender said.
The automotive sector is set to enter its second week of strikes today, with 90,000 workers in the construction industry also expected to down tools on higher pay demands.
Among individual shares on the JSE, Gold Fields (GFI) suffered the biggest declines in the sector, slumping 7.83% to R55.20, close to levels last seen on August 8. Investors said a poor production report from SA’s third-largest gold miner earlier last week caused the drop. Gold One International (GDO) registered its third day of losses, dropping 5% to R1.90 with Sibanye (SGL) falling 5.12% to R10.20 following an announcement of an acquisition deal between the two gold companies earlier last week.
Property stocks rebounded along with a firmer rand and local bond yields after coming under some selling pressure this week as market participants priced in a higher probability that the US will taper stimulus this year. SA’s largest listed local property owner Growthpoint (GRT) firmed 3.01% to R23.59, Redefine (RDF) gained 2.71% to R9.10 and Vukile Property Fund (VKE) added 2.67% to R14.99.
Massmart (MSM) led gains in the retail sector, climbing 4.43% to R155.07, with Ellies (ELI) adding 3.86% to R7.
Technology company Net1 UEPS (NT1) was initially up more than 8% on Friday following the release of their quarterly results but had jumped 37.96% to R103 by the close. A local trader, however, said the last jump in the share price may well have been a mistrade and if so, would be corrected today.
The spectre of industrial action in the gold sector weighed on sentiment on Friday, with South African futures losing some ground despite bank stocks gaining and US stocks opening higher. The near-dated Alsi ended down by 0.02% at 38,477 at the close. The number of contracts that traded was 29,240 from 38,486 on Thursday.