South African investors to focus on gold miners

26 Apr, 2004

The Johannesburg bourse this week will focus on big South African gold miners including Harmony and AngloGold, expected to post soft earnings as they kick off the reporting season for bullion producers.
Investors - particularly in currency-sensitive stocks such as paper group Sappi - will also keep an eye out for any surprise political news when the new cabinet is announced after Tuesday's Freedom Day holiday. But no change is expected in the crucial finance minister position held by Trevor Manuel.
Shareholders will also watch for any more dramatic moves in the price of gold and platinum, like those seen in the past week. South Africa is the biggest producer of both metals and home to Angloplat, the largest maker of the precious white metal.
"We've had a healthy shakeout in both gold and platinum and I'm bullish on both these metals in the short term," Morgan Sizer of Andisa Securities said.
The release of March consumer and producer inflation data, on Wednesday and Thursday respectively, may also provide hints on the outlook for interest rates, and may affect rate-sensitive stocks such as Absa and Standard Bank and retailers such as JD Group.
Economists polled by Reuters expect the CPIX inflation measure tracked by the central bank for monetary policy to slow down to an annual rate of 4.6 percent from 4.8 percent in February.
They also expect falls in producer prices to slow to minus 0.8 percent from minus one percent.
Gold producers are expected to see profits pressured due to a continued strong rand and lower output. And on Wednesday, the biggest producer of domestic gold, Harmony, is expected to post a trimmed headline loss per share while on Thursday, world number two AngloGold is forecast to report a 19 percent fall in adjust headline EPS for the first three months of the year.

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