Anglo helps JSE rise to above 50‚000

The JSE opened firmer on Tuesday as the market welcomed wide-ranging strategic announcements by previous market heavyweight Anglo American.

At 9.26am‚ the all share was up 0.32% at 50‚010.90 and the blue-chip top 40 rose 0.50%. Resources led the charge‚ gaining 2%‚ as Anglo American traded 8.07% higher at R96.50. Platinums were up 1.03% and financials gained 0.23%. Property added 0.37%. The gold index was down 3.08%.

The all share touched 50‚275 points in intraday trade on January 4‚ the first trading day of the year‚ but has not closed above 50‚000 since then.

In its announcement Anglo American said it was targeting $3bn-4bn from disposals in 2016. It said it wanted to sell its 70% interest in Kumba Iron Ore and intended to focus on three sectors in the future — diamonds‚ platinum group metals and copper.

The market shrugged off the group’s announcement to suspend dividend payments‚ as this was largely anticipated.

Anglo said it expected its net debt to be less than $10bn by the end of 2016. Capex for 2016 was reduced by 25% to less than $3bn for 2016.

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Anglo’s steps followed the downgrading of its debt to "junk" on Monday by ratings agency Moody’s. Moody’s said it did not expect Anglo American to generate enough operating cash flows to deliver substantial organic debt reduction in the next two years.

Kumba Iron Ore was flat at R54. AngloGold Ashanti was down 3.7% down at R165.63‚ mainly on the softer gold price‚ which was 0.75% lower at $1‚199.77/oz in the early morning trade.

Anglo American Platinum was up 0.43% at R297.01.

The JSE was supported by firmer Asian markets‚ with the Nikkei 225 adding 0.20% and the Hong Kong Hang Seng gaining 0.97%.

The risk asset rally continued in Asia‚ led by Chinese equities as Chinese credit growth exceeded market expectations‚ Barclays Research said in an early morning note.

Gold prices slid further after dropping $30 on Monday‚ as improving risk sentiment sent investors out of traditional safe-haven assets‚ Barclays said.

Among individual shares on the JSE‚ Glencore surged 4.03% to R24 as positive sentiment spread throughout the resources sector.

Iron ore producer ArcelorMittal shed 2.27% to R7.76 after releasing results earlier in the week.

Among banks‚ Nedbank added 0.50% to R195.29 ahead of the reporting season in March. Capitec lifted 0.27% to R506.34.

Property group Hyprop was 1.26% higher at R105.50.

Educational group Curro added 1.33% to R40.53.

- TMG Digital/BDlive