By Alec Hogg
Here’s your Biznews Flash Briefing:
- Investors around the world took fright yesterday when the US seized a North Korean ship alleging it had been illegally transporting coal from president Kim Jong Un’s ostracised country in violation of US sanctions. The seizure took place hours after North Korea launched its second nuclear weapons test in a week. Adding to the jitters was an escalation of tensions in trade talks between the US and China. After Sunday’s threatening tweet from US president Donald Trump, China took a new hard line yesterday which pundits said threatened to derail negotiations which are scheduled to resume in Washington. The US added to the pressure by formally filing paperwork that will raise tariffs on $200bn worth of Chinese imports from 10% to 25% at noon US time today.
- South Africa’s national and provincial election dominated the local news yesterday with investors a little concerned by the ANC’s inability to poll at their hoped-for 60% level. The latest forecasts have the ANC ending at 58%, the DA at 21% and the EFF at 10% – mostly in line with pre-poll forecasts. On a day when global stocks were generally softer, South African share prices fell more than their international counterparts. The JSE Top 40 Index dropped almost 3% with four shares down for each one that improved. The rand had a turbulent day, moving in a 16c range against the US dollar as traders took positions on the election results. At the close of local trading, however, the currency was near its best levels, improving from the morning’s R14.45 to trade at R14.32.
- AngloGold Ashanti yesterday announced that it is in the early stages of a process to sell Mponeng, the last mine it owns in South Africa. Mponeng is the deepest mine in the world and would require an investment of $1bn to extend its life beyond the current estimate of eight years. The sale will draw the curtain on the relationship with the country by a business that Sir Ernest Oppenheimer created in Johannesburg just over 100 years ago. AngloGold was spun out of Anglo American in 1998 and has progressively reduced its exposure to South Africa through investing in gold mines elsewhere in Africa and on three other continents. AngloGold’s share price dropped 1.5% yesterday.
- Elsewhere on the JSE, the Remgro-controlled chicken company RCL continued its recent run, picking up another 3% to close the session at R15.28. The shares have risen 18% in the past two weeks, with investors expressing relief RCL has avoided class actions suits that arose on the listeriosis deaths where its competitor Tiger Brands is judged to have been responsible. At the other end, Sappi’s share price took an 8.5% pasting after the release of disappointing results for the three months to end March. Profit fell from last year’s $102m to $72m and in the past year the net debt burden has grown by around $50m to $1.7bn. Mining stocks Impala Platinum, Sibanye and Anglo Platinum were also among the day’s biggest losers, closing down around 6%.
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