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Surge from Sasol counteracts pressure from Harmony

Surge from Sasol counteracts pressure from Harmony < News < Bet On Markets

Johannesburg — Shares in energy group Sasol jumped more than 3 percent yesterday, pushing the FTSE/JSE Top40 index higher, despite a 5 percent fall in gold mining company Harmony Gold.

The Top40 ended 0.15 percent higher at 11 119.99 and the FTSE/JSE Africa all share index inched up 0.06 percent to 12 313.

Shares in Sasol rose 3.87 percent to R112.70 as they moved out of oversold territory on the technical charts.
«Sasol was really oversold the day before,» one trader said.

But Harmony shares closed 4.98 percent down at R57.49 — their lowest since November 2001 — after its hostile bid target, Gold Fields, lost a key shareholder vote on a merger with Canadian mining house Iamgold.

Investors were speculating that Harmony would be successful in its all-share bid for Gold Fields, the world’s fourth-biggest gold producer, which meant that it would have to issue new shares to pay for the transaction, diluting its share capital.

Analysts said the market value of Harmony’s bid had fallen below the Gold Fields share price, suggesting that the market was pricing in an increased offer.

One fund manager said: "It simply means everyone will apply their minds to what an adequate ratio will be.

«As you can see, the market has started to price that in.»
Shares in Gold Fields closed 0.22 percent higher at R77.82.

Traders said financial shares gained as many funds rotated out of resource stocks.

A trader said: «We are seeing a migration from resources into financials and industrials. We have portfolio managers looking to lock in year-end profits.»

Shares in investment bank Investec rose 1.91 percent. Insurer Sanlam gained 1.75 percent and iron ore producer Kumba ended the day 1.72 percent higher.

Shares in Standard Bank, which is South Africa’s biggest bank by assets, closed 1.02 percent higher.

Among mid-cap stocks, bulk retailer Massmart fell 5.52 percent to R45.35 after it said that Christmas sales were below expectations.

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