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Anglo/Vale rumour drives the JSE up
Marc Hasenfuss
Posted: Wed, 18 Jun 2008
[miningmx.com] -- AH, the value of good gossip. Talk is supposed to be cheap, but a rumour certainly prevented the JSE from ending Tuesday in the red.
The largely depressed market was dragged kicking and screaming upwards by a mining giant Anglo American, which surged 8.4% on takeover talk emanating from London.
Apparently Brazilian mining giant Vale is ready to samba with Anglo American, and according to reports was "lining up cash" for the mega-deal.
I might have been happier if Anglo issued a trading statement around improved fundamentals or a stunning resource inference. But a rumour?
Until the big "A" issues a cautionary statement I can't see Tuesday's sprightly sentiment as anything but artificial stimulus.
Then again an 8% plus shift in Anglo's share price (in deals worth R1.9bn might suggest more than a few big investors are taking the rumour seriously.
Rival mining giant BHP Billiton was up 4.7% in sympathy, but most other JSE indices were anything but frolicking. Banks dropped 1.44%, construction & materials down over 3% and consumer goods down by more than a 1%.
Platinum stocks probably caught some of the positive ripples from the Anglo rumours. Wesizwe (+7.5), Aquarius (+4.6%), Angloplat (+3.26%), Lonmin (+6.3%),
Eastplats (+2.5%) and Northam (+2.26%) were the standouts.
Popular shares on the slide on Tuesday included cement maker PPC (down 3%), industrial heavyweight Barloworld (down 4%), Rainbow Chickens (down 3,5%) and furniture retailer JD Group (down 3,28%).
The "scary" trade of the day was low-cost housing developer, Sea-Kay, which slipped 5.29% to 161c with around 1.6m shares changing hands. Property group Colliers, which took a hit on Friday, lost another 14% to 120c.
Amongst the day's biggest losers were a handful of shares that shed loads of value with tragically few shares changing hands.
These "silly" trades were no doubt the work of a few spooked retail shareholders. Those companies unfortunate to take a big smack from a small hand included vehicle retailer Combined Motor Holdings (down 4% to 670c with 1 100 shares trading), electronics group Ellies (down 6% to 200c with 3 000 shares changing hands), Capitec Bank (-7% with 4 157 shares
trading), woodworking specialist William Tell (-40% with only 3 000 shares trading) and Great Basin Gold (-4.5% with 6 050 shares trading).
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