Bloomberg News

Palabora Drop Ends JSE’s Best 4-Month Rally: Johannesburg Mover

February 07, 2012

Feb. 7 (Bloomberg) -- Palabora Mining Co. Ltd., a South African copper producer majority owned by Rio Tinto Group and Anglo American Plc, fell, ending the best four-month rally on the nation’s benchmark stock index.

The shares fell 7.8 percent, the most since Oct. 4, to 148.50 rand at 5 p.m. close in Johannesburg. Palabora gained more than 68 percent through yesterday’s closing price since reaching a one-year low in October, more than any other share over the period on the 162-stock FTSE/JSE Africa All Share Index.

“This is profit-taking after a very good run,” Hennie Fourie, a portfolio manager at PSG Konsult, said by telephone from Pretoria. “It’s been a crazy share move.”

Rio Tinto and Anglo American, which together own about three-quarters of Palabora, plan to sell their entire holdings in the company because it no longer fits their investment objectives, they said Sept. 5. Net income at Palabora surged to 1.46 billion rand ($193 million) in the 12 months through Dec. 31 compared with 595 million rand a year earlier, the Phalaborwa, South Africa-based company said in a statement yesterday after trading in Johannesburg closed.

“The company announced really good results,” Fourie said. “But the good news was already priced in the share.”

--Editors: Vernon Wessels, Karl Maier

To contact the reporter on this story: Sikonathi Mantshantsha in Johannesburg at smantshantsh@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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