JSE mining stocks are riding high on bumper financial results

JSE-LISTED gold and mining stocks gathered steam yesterday on Anglo American Platinum’s (Amplats) bumper financial results for the year ended December 2018.

Amplats, the world’s biggest platinum producer, whose solid financial results saw headline earnings shoot up 95 percent to R28.93 per share, was a major contributor to the surge in mining stocks, analysts said.

René Hochreiter, an analyst at Johannesburg-based Noah Capital Markets, said mining stocks shone as the market factored in the potential better results in the industry.

“The market is realising what last year’s average basket price can do. They have seen Amplats releasing fantastic numbers, and are now expecting higher numbers from its peers,” said Hochreiter.

Amplats said that palladium and rhodium contributed to the robust financial results in 2018. Palladium climbed 18 percent in 2018 to $1 029 (R14 449) an ounce last year; it’s expected to head to $2 000 an ounce this year on the shortage in the market. “If earnings at Amplats can go up 100 percent, we can expect earnings to go up 500 percent at Impala Platinum, 150 percent at Royal Bafokeng Platinum, and the same for Sibanye-Stillwater,” said Hochreiter.

Black-owned Royal Bafokeng Platinum led the rally to close 10 percent higher on the JSE yesterday at R33 a share.

Earlier yesterday gold producer Gold Fields reached its highest level in a year at R56.63 a share, but closed 4.97 percent up at R55.09.

Sibanye-Stillwater rose 6.24 percent to close at R15.15 a share, while Impala Platinum, the world’s second-biggest platinum producer, rose 3.68 percent on the JSE to close at R50.20 a share yesterday.

Northam Platinum closed 1.84 percent higher at R50.81 a share.

Amplats attributed the surge in earnings to the higher palladium and rhodium prices recorded in the 12 months to December.

Seleho Tsatsi, an investment analyst at Anchor Capital, said the stocks rally was helped by strong palladium prices, saying the precious metal had gained in early trade.

“Sibanye is the second biggest palladium producer in South Africa and the third biggest in the world,” said Tsatsi.

Gold touched $1 324 an ounce, just below a nine-month peak of $1 326.30 at the end of January. |