South African shares rose on Tuesday, buoyed by Nedbank after it reported strong first-half profit, despite Kumba Iron Ore reaching an all-time low.
Shares in Nedbank climbed more than 5% to close on R271.02 after South Africa’s fourth-ranked bank reported a 14% increase in its half-year profit, triggering a rise among some other financial stocks.
Old Mutual, which has a majority stake in Nedbank, gained 2.9% to R43.31.
Shares in FirstRand rose 3.26% to R56.38 while Standard Bank added 2.7% to R156.25, valuing South Africa’s largest two banks above Anglo American in terms of market capitalisation on the Johannesburg Securities Exchange as mining fortunes dip.
“The markets like the fact that this space seems robust,” said Ryan Woods, senior trader at Independent Securities, referring to the financial sector.
Industrial and mining companies have been hit hard by lower demand and weak prices, but the good performance of the large banks have won favour with investors, said Woods.
“Mining and industrials have been hit hard,” he said.
Shares in Kumba, the South African iron ore unit of Anglo, fell 3.63% to R98.36.
Kumba’s stock hit an intra-day low of R94.85, more than R20 below its listing price in 2006, and has shed more than 60% so far this year as prices for the commodity slumped.
Anglo rose 0.4% at R150.99, steadying after it hit a year-low during intra-day trading.
AngloGold Ashanti, Africa’s top bullion producer, fell 1.86% to R74.
Gold hit $1,077 an ounce last month, a 5-1/2-year low, and was at $1,084 on Tuesday, depressed by the prospect of higher US interest rates and weak demand in major markets.
The JSE Top-40 index gained 1.73% to close at 46,917.54 points and the broader All-Share index climbed 1.57% to 52,437.84.
Trading volumes were lively with nearly 248 million shares changing hands, well above last year’s daily average of 183 million.