Publications
Partners
Johannesburg - Sasol’s [JSE:SOL] share price, which has been under pressure for the last three months, gained more than 6% on Thursday in response to an agreement by Organisation of the Petroleum Exporting Countries (Opec) members to curb output. This boosted the oil price on Wednesday evening to almost $50 a barrel.
The local producer of synthetic fuel was one of various star performers on Thursday as the JSE rallied strongly in line with global markets, as energy shares pulled markets higher globally. Analysts said the surprise agreement boosted investors' appetite for riskier assets.
The All-share index on the JSE at mid-morning was 1.84% higher at 52 727 points and the Top 40 index gained 1.98% to 46 129 points, as the Resources index traded 4.46% higher at that point. Gold was also 4.06% firmer, the Financial index lifted 1.55% and the Industrial index followed European markets higher, gaining 1.30%.
It was however notable that the local indices all opened sharply higher to adjust to the rally on global markets, but then moved sideways for the rest of the morning.
Analysts said world market moves are all due to the higher oil price, which rallied more than 5% after Opec agreed to cut output to a range of 32.5 to 33.0 million barrels a day from the group's current estimate of 33.24 million barrels.
Brent jumped as high as $49.09 on Wednesday, but on Thursday was off its high at $48.08 as investors took some profits. Scepticism over how the Opec agreement would be implemented also crept in, as some analysts regarded it as flimsy.
Each member's output levels will be decided at the next formal Opec meeting in Vienna in November, when non-Opec countries such as Russia could also be invited to join the cuts.
Goldman Sachs said the deal could add as much as $10 to oil prices in the first half of next year but, given the uncertainty of the proposal, stuck to its year-end and 2017 oil price forecasts.
Sasol’s share price lost more than 21% over the past three months as investors were concerned about the influence of a lower oil price on profits and its ability to finance large capital projects in the United States. Sasol’s full-year profit dropped 17% in the recent financial year.
But on Thursday morning the share price jumped more than 6% to R385.00 in early trade, before moving sideways for the rest of the morning. By mid-morning it was 5.5% higher at R378.47.
BHP Billiton [JSE:BIL], which also has extended interests in oil and gas, gained 4.76% to R204.75. It was the first time since August 25 this year that the share price traded above R200.
Anglo American [JSE:AGL] gained a solid 4.59% to reach a new 52-week intraday high of R171.58. The share price has already gained 153.20% for the year to date, as it traded at a 52-week low of R53.30 on January 19.
Two other big commodity shares, Glencore [JSE:GLN] and Impala Platinum [JSE:IMP], also reached intraday 52-week highs. Glencore traded 3.76% up to a new high of R38.56, 86.7% higher than the beginning of the year.
Impala Platinum, which will replace SABMiller [JSE:SAB] on the Top 40 index when the beer giant disappears from the JSE board on Friday, gained 5.34% to a new high of R72.14. Before Thursday’s trade Impala already gained 166.7% for the year to date.
SABMiller, which is trading on the JSE for the last day after its take-over by Annheuser Busch InBev [JSE:ANB] was approved by shareholders on Wednesday, slipped 0.02% to R782.05. The share earlier traded in a range of R770 to R786.00.
Naspers [JSE:NPN] traded 2.48% higher at R2 434.91, but Steinhoff [JSE:SHF] was 0.85% softer at R80.03 after it gained more than 6% on Wednesday on news that business tycoon Christo Wiese will increase his stake in the company from 17% to 23%.
READ: Billionaire Christo Wiese invests over R24bn more in Steinhoff
Aspen [JSE:APN] was the busiest share on the JSE in terms of value, with more than 5.7 million shares trading for R178bn on the news that GlaxoSmithKline, the UK’s biggest drug maker, will dispose of its remaining stake of 6.2% in the company to institutional investors.
The offer price for the sale will be determined through an accelerated book building process, which will start immediately. At Wednesday’s closing price in Johannesburg of R316.87 the stake is valued at R8.94bn, but the share price dropped 2.08% on Thursday to R310.28.
MTN’s [JSE:MTN] share price gained 3.3% to R122.73 on news that it is considering selling about $500m in shares of its Ghana business. The sale would help MTN meet conditions it agreed to last year when it spent $67.5m for the right to use spectrum that can carry high-speed mobile data for customers in Ghana.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
