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    Investors flock to gold as economic uncertainty continues

    Local markets

    By midday, the JSE All Share had fallen 1.27% as losses in the oil and gas sector weighed down the local bourse. Gold miners bucked the trend, gaining 3.67% after the gold price soared. The All Share took direction from weaker Asian markets, though losses were limited thanks to a weaker rand.

    The rand had fallen to trade at R10.17 per US dollar at noon, as investors became risk averse after a report by Moody’s of a recession in Eastern Europe that would pressurize their Western headquarter banks.

    Gold reached its highest price in seven months, trading at $959.90 an ounce as investors continued to be spooked by the prolonged economic instability.

    International markets

    US markets were closed yesterday for the Presidents Day holiday.

    Japan’s Nikkei average closed 1.35% down to its lowest level in almost four months this morning. Losses in banks and property shares weighed on the index as investors continued to fret about credit.

    The Hang Seng tumbled 3.79% after the mainland’s index finally ended its rally and investors were concerned about slowing corporate earnings. The Bank of East Asia was one of the exceptions to the trend as a positive earnings report encouraged shares to rise.
    Britain’s FTSE 100 had dropped 1.36% by midday, pressured by falling commodities. Trade was cautious as investors awaited inflation figures for the United Kingdom, and the Wall Street holiday meant there was little guidance for the index.

    Share price news

    After only two deals, Pamodzi Gold Limited soared 23.71% to trade at R1.20 a share at midday. Also in the gold mining sector, Simmer and Jack Mining Limited enjoyed a steady 8.13% increase in share price to trade at R3.06 a share at around 12:00.

    Palabora Mining Company Limited in the nonferrous metals sector plunged 11.81% as eight investors rid themselves of shares, bringing the price down to R47.05. Palabora cautioned shareholders this morning that they were in negotiations regarding a potential broad-based Black Economic Empowerment transaction which might affect their share price.

    Investment bank Peregrine Holdings Limited was again amongst the top movers down, losing a further 7.41% to trade at R5 a share at noon.

    Permalink2009-02-17, 12:45:51, by Natalie Email , 1 comment
    Trackback address for this post: http://blog.sharenet.co.za/htsrv/trackback.php/1163

    Comments, Trackbacks:

    Comment from: Peet Viljoen [Visitor] Email
    Im just curious about Pamodzi Gold share price increase as again on the 2nd of March 2009 the mining operations was stopped deu to strikes at their mining operations in the goldfields deu to non payment of salaries and suppliers. Most of the suppliers didnt receive payment for more than six months! Over 5000 employees didn't receive pay nor the munisipality? Is Pamodzi Gold in a state of no repair as their Freestate operations only produced 47kg of 75% purity gold for month Feb 09 whereas this operation in Jan 08 produced over 340kg per month as per the takeover agreement with Tsitle Mining. Hows it possible that the shareprice can increase from 49 sents per share and peak at R2.20 and then fall back and stabalize to R1.49 in a space of two weeks? This company's assets to liabilities and current state of affairs doesn't justify a share price of R1.49.
    PermalinkPermalink 2009-03-02 @ 11:46

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