Arthur Buchner: JSE Report


BROADCAST TRANSCRIPT: On to Arthur Buchner, he’s from BoE Securities, let’s take a look at some of the stories behind today’s move on the JSE. Arthur, let’s kick off with the likes of Metcash. Up 10% today. Any idea what’s behind a move of that sort of degree?

ARTHUR BUCHNER: It seems that there’s been a switch out of a couple of stocks, and the weird thing about it is that this morning the rand, when we came in, was considerably stronger than when we went out this afternoon, yet the resources stocks all came under pressure even through the afternoon. Now this is totally the opposite of what has happened over the last three to four weeks – maybe it was a capitulation of some of the resource bulls, because if you look at the financial sectors, they were pretty much unhurt today and your retail sectors not faring too badly. Metcash itself, I wouldn’t really know what is happening on that front.

MONEYWEB: Talking about resources and looking at gold in particular – the gold spot price itself not moving too much today. Currently at $278.95. Yet we saw the gold index lose 2.5%. Why the disparity?

ARTHUR BUCHNER: Well, this is all coming out of domestic selling because at the moment, looking at the American markets, there’s actually bigger demand and all those stocks are trading actually much higher. So it seems to be a local fund manager saying the golds have had a big run, may be time to take some profit, and I don’t think affected nationally by the actual gold price or the fact that the rand was stronger this morning, but more just by someone liquidating portfolios.

MONEYWEB: Datatec, not a good day for that company. Down 4% and we didn’t see a follow on from Didata?

ARTHUR BUCHNER: I think they’re really starting to trade differently. People aren’t painting one with the other’s brush. They’re looking at earnings and relative to what Didata is, it’s been knocked a lot harder than Datatec has been. Datatec has had a good rally and I think someone taking profit there too.

MONEYWEB: Any positive news to come out of the JSE today?

ARTHUR BUCHNER: Not really, and no real earnings that I saw either. Besides for the rand, which was strong, which I would take as positive for myself as an investor, but negative on the resources. There wasn’t really too much happening.

MONEYWEB: What about BHP Billiton, any reaction to the quarterly numbers that they put out today?

ARTHUR BUCHNER: They’ve been very strong in the run-up to the announcement and I think there was some profit taking there. I think they were up about 8% over the last two weeks, so you can expect a little bit of buy on rumour sell on fact.

MONEYWEB: What about volume on the JSE, has it picked up since the festive season?

ARTHUR BUCHNER: We’ve actually had good volumes today, R2.5bn, not driven by futures as much as what it has been in the previous couple of sessions. So I think a couple of institutions actually starting to dabble.

MONEYWEB: The JSE taking a bit of a breather today, the overall index down one and a third of a percent. The Alsi 40 index losing 1.5, resources the hardest hit, golds down 2.5 with the resources index also off 2.5%.

Posted in Market commentary

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