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Platinum, telecoms drag S.African bourse, rand dips

Published 12/15/2009, 11:42 AM
Updated 12/15/2009, 11:45 AM
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* Stocks fall, led by platinum and telecoms shares

* Rand slips on importers, dollar gains

* Govt bonds weaker despite easing inflation

JOHANNESBURG, Dec 15 (Reuters) - South Africa's benchmark stock index ended in the red on Tuesday, dragged down by telecoms and platinum shares and as investors booked profits ahead of a holiday on Wednesday, while the rand slipped versus a stronger dollar.

Government bonds failed to benefit from slower-than-expected inflation data, with investors seeing interest rates steady well into 2010.

The Johannesburg Top-40 index fell 0.58 percent to 24,534.68 points, snapping three days of gains, while the broader All-Share index slipped 0.52 percent to 27,098.45 points.

"It's not a very very happy day today ... we've got a public holiday tomorrow and I think the guys are just squaring off their positions," said Michael Carlsson, a portfolio manager at Consilium Capital."

"Platinum shares had a very big run over the last few days, it was a bit top heavy and maybe some profit-taking coming in on platinum."

Anglo Platinum, the world's top producer of the white metal shed 3.26 percent to 777.80 rand and Impala Platinum slipped 2.09 percent to 187 rand.

South African petrochemicals group Sasol was the biggest loser, sliding 3.76 percent to 283 rand.

The rand was trading at 7.4450 against a firmer dollar at 1540 GMT, 0.7 percent weaker than its close in New York on Monday, when it rallied sharply after the Johannesburg session closed.

Traders said a big overnight surge had been driven by a large export order in a thin market, and that the currency had retreated soon after the local session started.

The dollar rallied, hitting a 10-week high against the euro on concerns about euro zone banks and on speculation the Federal Reserve may wind down emerging support programmes quicker than expected. The Fed starts a two-day policy meeting on Tuesday.

The euro is the currency of South Africa's main trading partners and its moves often impact on the local unit.

"We are seeing the dollar losing a bit of shine now but for most of the day it has been on the front foot," Bidvest bank chief dealer Ion de Vleeschwuer said.

"There's also been massive importer demand ... people stocking up on foreign currency before the holidays."

South African markets will be closed on Wednesday for a holiday and many traders will use it as the start of their end-of-year vacation.

The rand largely ignored domestic inflation data that showed a slower rise than expected for November, and government bonds soon gave back initial gains, also sparked by good demand for the Treasury's final weekly bond auction.

Statistics South Africa said the targeted consumer inflation eased a percentage point to 5.8 percent year-on-year last month, slower than the consensus 6.0 percent forecast and marking the second month in a row back in the central bank's 3 to 6 percent band.

But analysts have warned that base effects -- inflation had been high a year ago but slowed sharply into 2009 -- could see it outside the target range again, adding the data did not signal another interest rate cut.

"Although it's a good number, the momentum of the downward move is slowing. The lower it goes, the more sticky it will become," de Vleeschauwer said.

The yield, which moves inversely to the price, on the 2015 bond was up 1.5 basis points for the session at 8.41 percent, while the 2036 yield added 2 basis points to 8.77 percent. Also on the bourse, the JSE telecoms index was down 2.6 percent with mobile operator MTN shedding 3.14 percent to 111 rand and fixed line operator Telkom losing 2.27 percent to 33.96 rand.

But South African consumer goods firm Tiger Brands bucked the trend, rising 1.85 percent to 165 rand and furniture maker Steinhoff International gained 1.72 percent to 20.70 rand. (Reporting by Gordon Bell and Phakamisa Ndzamela; Editing by Rupert Winchester)

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