Anglo shares slip after brush-off

The JSE closed firmer amid mixed global peers on Monday with the focus this week on the consumer inflation report in the US.

Shares in Anglo American closed 0.97% lower at R634.80 on the local bourse after news that the mining giant had rejected a revised buyout offer by Australian mining group BHP, valuing the company at $42.67bn.

Reuters reported on Monday that Anglo called the revised offer “highly unattractive” for its shareholders. The new offer is 10% higher than BHP’s first one, or a 15% increase in the merger exchange ratio, lifting Anglo shareholders’ aggregate ownership in the combined group to 16.6% from 14.8% in the earlier proposal, Reuters reported.

Globally, investors will look for fresh insights into the US Federal Reserve’s monetary policy when April’s consumer price index (CPI) is released on Wednesday. Inflation has been sticky in recent months, which has led to the Fed pushing back the first interest rate cut. Markets initially priced in a cut as early as March.

Fed policymakers held interest rates steady at their recent meeting, reiterating that they need to see more evidence that inflation is moving towards the central bank’s 2% target before cutting rates.

INSIGHT

“Market participants will be keeping a close eye on US CPI to hopefully gain some insight into the Fed’s next move,” RMB head of forex execution Matete Thulare said.

According to Investec chief economist Annabel Bishop, markets are hopeful that the CPI core measure (which excludes energy and food) will drop to 3.6% year on year from 3.8%. “The first US interest rate cut can still be expected to be delivered in November,” she said.

The JSE all share gained 0.28% to 78,686.89 points on Monday, with major indices mixed. The top 40 index added 0.32%.

At 6.15pm, the Dow Jones industrial average and the S&P 500 were little changed, with the former at 39,493 points. In Europe, the FTSE 100 was down 0.22%, France’s CAC 40 shed 0.12% and Germany’s DAX lost 0.16%.

The rand gained for the fourth consecutive session on the day, touching an intraday best of R18.30 to the dollar. At 6.20pm, it had strengthened 0.51% to R18.3339/$, 0.16% to R19.7918/€ and 0.29% to R23.0332/£. The euro was 0.24% firmer at $1.0796.

Gold lost 0.95% to $2,337.56/oz, while platinum gained 0.61% to $1,011.80/oz. Brent crude was 0.23% firmer at $82.98 a barrel.