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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: goldsheet who wrote (66044)	3/19/2001 8:18:56 AM
From: long-gone	Read Replies (1) \| Respond to of 116759

MAJOR GOLD PRODUCTION OWNERSHIP DEAL Monday March 19, 7:43 am Eastern Time Billiton, BHP merger plan to boost S.Africa bourse By Emelia Sithole JOHANNESBURG, March 19 (Reuters) - The planned $28 billion merger of BHP (Australia:BHP.AX - news) and Billiton Plc (quote from Yahoo! UK & Ireland: BLT.L) will boost the image of the Johannesburg bourse, dented in recent years by the migration offshore of most of its blue-chips, analysts said. But they said on Monday the continued secondary listing of Billiton shares in Johannesburg would have little impact on share volumes on the exchange, whose liquidity is low at only around a third of London's. ``From a profile point of view, it will be positive (for the JSE),'' Deutsche Securities equity analyst Dave Murray told Reuters. ``Clearly from the number of deals that we've seen particularly in the resource sector which have concerned South African companies, I think that gives a pretty clear message that there are a number of South African companies which are exceptionally good value and are good businesses,'' he said. South African-born resources group Billiton and BHP said on Monday they planned to merge to become the world's second largest minerals and metals firm, retaining their respective primary listings in London and Australia. Billiton, which was the first high profile company to move its domicile to London in 1997 as it grew into one of the world's largest resources groups, said its Johannesburg secondary listing would be unaffected by the marriage. Its move offshore started an exodus of other top blue-chip companies, among them the country's largest group Anglo American Plc(quote from Yahoo! UK & Ireland: AAL.L), financial house Old Mutual (quote from Yahoo! UK & Ireland: OML.L), South African Breweries(quote from Yahoo! UK & Ireland: SAB.L) and more recently IT giant Dimension Data(quote from Yahoo! UK & Ireland: DDT.L). BLUE-CHIP EXODUS DENT JOHANNESBURG IMAGE Analysts say although these high profile migrations helped boost trade in these companies' shares as arbitrage opportunities arose, they had dealt a blow to the Johannesburg bourse's image. Murray and other analysts said the decision to maintain Billiton's secondary listing would help raise the local exchange's profile as Billiton's weighting increases as its market capitalisation surges as a result of the merger. Billiton has a market capitalisation of 87 billion rand ($10.94 billion) and a weighting of 5.9 percent in the JSE Securities Exchange's benchmark all-share index (^JSAI - news). Its surge to year peaks on Monday pushed the index 1.8 percent off 10-week troughs to 8,464.2 points at 1214 GMT. Billiton rose 14.75 percent to 36.95 rand in Johannesburg and jumped 12 percent to 324 pence in London as the markets applauded the planned tie-up with BHP. ``I think that the deal itself will probably enhance the image of the JSE and Billiton's weighting within the JSE from the fact that it will encompass a larger company,'' said a local market analyst who declined to be named. Billiton's operations would also benefit operationally from cost savings resulting from the merger, they said. ``To our mind the deal does make sense. There will be operational cost savings that will come through,'' Murray said. ``It's a larger business so where there are economies of scale...that increases the attractiveness of the companies.'' biz.yahoo.com