Strikes at two of the world's biggest platinum producers and foreign interest in the banking sector will be the main focus of the South African share market this week after this week's record highs, traders said.
South African banking shares have rallied over the last couple of weeks after confirmation of long-standing rumours that Britain's Barclays is interested in acquiring a controlling stake in Absa, one of the top four banks with a market value at about 40 billion rand ($6.2 billion).
"The stock exchange is beginning to look toppish, but foreigner interest in the banking sector can keep the market on the boil. We have learned that Barclays was not the only institution looking," a Johannesburg trader said.
According to South Africa's Business Day, another British bank, Standard Chartered, held high-level talks with Absa until last week, when Absa picked Barclays for formal negotiations.
Standard Chartered bought a small Internet bank in South Africa last year but has declined to say whether it was interested in Absa.
The rally in the Johannesburg Securities Exchange's banking sector helped the bourse to achieve all-time peaks on two consecutive days during the week, and it looked set for another record close on Friday.
The JSE All Share Index was up 0.78 percent at 11,852.23 at 1440 GMT on Friday, already a fresh peak.
"Besides banks, there could be more gains coming from the gold sector. That will feed through to heavyweights like Anglo American plc and BHP Billiton," the trader said. Gold was on a steady upward path on Friday in Europe as prices hit a fresh 5-1/2 month peak on the softer dollar and as expectations mounted that the metal would reach $420 an ounce.
Speculation that the South African central bank may cut its repo rate for the second time this year at a policy meeting in mid-October - a step which would probably weaken the rand by eroding its high-yield appeal - was also supportive.
"I think this will be a good week for resources. The market seems to be pricing in an interest rate cut - that will hurt the rand," another analyst said.
South Africa's mining stocks benefit from a weaker rand, which leads to higher income in rand from their dollar-priced exports and lower costs, which are denominated in the local currency.
The market will be watching developments at Anglo American Platinum (Angloplat) and Impala Platinum after the National Union of Mineworkers declared a strike which started on Thursday.