S.African Stocks Dip As Worries Rise Of Labour Friction

by
Reuters
South African stocks closed slightly lower on Monday with mining stocks including Harmony Gold pulling the market back from a record high set early in the session on concerns of fresh labour strife hurting the sector's earnings.

S.African Stocks

South African stocks closed slightly lower on Monday with mining stocks including Harmony Gold pulling the market back from a record high set early in the session on concerns of fresh labour strife hurting the sector's earnings.

The All-share index, the broadest measure of Johannesburg stock performance, closed 0.28 percent lower at 40,162.56 and the blue chip Top-40 index closed 0.38 percent down at 35,641.67.

Shares of Harmony Gold shed 3.5 percent to 68.98 rand after it warned it might be forced to mothball a mine accounting for 14 percent of its production after labour tensions at its Kusasalethu mine clouded the outlook for operations.

The gold miner's woes mark a rocky start to 2013 for South Africa's mining industry, after a year in which it was rattled by violent wildcat strikes that led to more than 50 deaths and severely damaged the country's investment image.

The National Union of Mineworkers, the sector's most powerful labour group, said it expects a sizable number of job losses in the industry this year.

"These days people are willing to pay a premium for certainty - for knowing what to expect," said Thys van Zyl, a portfolio manager at Thebe Stock Broking in Johannesburg.

He said the market was pulling back after last week's rally when it closed at record highs three days in a row.

Among the day's top gainers were banking and financial services FirstRand, whose shares gained 1.7 percent to 32.11 rand. Other gainers in the sector included Nedbank and Investec, which both ended about one percent higher.

Trade was thinner with 113 million shares changing hands, compared to the 122 million traded on Friday. Advancers outnumbered decliners, 164 to 140.