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Miners gain in South Africa, telecoms take a hit
June 5, 2012 / 3:57 PM / 6 years ago

Miners gain in South Africa, telecoms take a hit

* Top-40, All-Share gain over 0.1 pct

* Telkom down over 6 pct

JOHANNESBURG, June 5 (Reuters) - South African stocks posted modest gains on Tuesday with stronger-than-expected data on the U.S. service sector boosting Johannesburg’s beaten-down mining sector.

Exxaro climbed over 2 percent to 193.25 rand after the diversified miner said it would upgrade a railway line in the Republic of Congo to transport millions of tonnes of ore from its recently acquired Myoko project.

“The market are still concerned about the overseas situation but it looks like we have reached levels where there is buying interest, especially for some mining shares that have been hit quite hard in recent times,” said Afrifocus Securities portfolio manager Ferdi Heyneke.

“We are moving further on the upside. It looks like we can probably trend a bit higher there at the moment.”

The JSE Top-40 blue-chip index was up 0.12 percent at 29,180.76 and the broader All-share index gained 0.13 percent to 33,117.85.

Johannesburg’s mining index gained over 1 percent, its biggest intra-day gain in about a week. Platinum miners have been hard hit by falls in the spot price for the precious metal over the past few months.

Clover was up 2.2 percent to 13.70 rand - its biggest intra-day gain in two months. The dairy foods maker is acquiring a juice processor and announced on Tuesday it had renewed an outsourcing agreement with a logistics firm.

Mobile phone operator MTN took a knock to fall by more than 1 percent on news that South Africa’s elite Hawks police unit would be investigating it for alleged graft relating to its purchase of an operating licence in Iran.

The telecoms giant is facing a $4.2 billion U.S. civil claim by Turkish operator Turkcell that says MTN bribed officials and promised weapons to Iran to bag the licence. MTN has denied the allegations.

Africa’s biggest fixed line operator Telkom continued a skid that has seen it fall by over 12 percent since the government said on Friday it would not allow a deal where South Korean telecommunications giant KT Corp would buy a 20 percent stake in the troubled firm.

The deal was seen as a lifeline for Telkom, with a diminishing demand for fixed-line connections and fierce competition by bigger rival mobile operators Vodacom and MTN.

Telkom fell over 6 percent to 20 rand on the day.

Advancers edged past decliners 147 to 122, while 66 shares remained unchanged. Trade was slow, with 157 million shares changing hands, according to the latest available data from the exchange.

Some 162 million shares changed hands in the previous session.  (Reporting by Helen Nyambura-Mwaura; Editing by Jon Herskovitz)

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