South African Stocks Gain, Paring First Quarterly Loss in Seven

South Africa’s benchmark stocks index gained for a fourth day, paring the gauge’s first three-month decline in seven quarters that was propelled by a slowing economy and labor unrest at the country’s mines.

The benchmark 166-member FTSE/JSE Africa All-Share Index advanced 1.3 percent to 39,578.10 by the close in Johannesburg, the highest level since June 19. The Federal Reserve this week downplayed investor speculation that stimulus will be tapered soon, spurring the MSCI Emerging Markets Index to its biggest weekly rally in nine months.

The South African advance wasn’t enough to curb the quarterly loss as domestic uncertainty and weaker prices for commodities pushed the all-share measure 0.7 percent lower, its first decline since the three months through September 2011. The Reserve Bank lowered its forecast for growth this year to 2.4 percent from 2.7 percent after gross domestic product expanded at the slowest pace since the 2009 recession in the first quarter. Sibanye Gold Ltd., and Anglo American Plc were among the gauge’s 10-worst performers.

“The mining houses had a torrid time,” Ryan Wibberley, the head of equity dealing for frontier and emerging markets at Investec Asset Management, said by phone from Cape Town. “In many ways the mining industry in South Africa has endured a perfect storm over the last several months.”

Platinum prices declined 17 percent in the second quarter as three South African workers died in violent union rivalry in May and June, adding to the deaths of at least 44 people at Lonmin Plc’s Marikana operations in August. Metals and other mining commodities account for more than 50 percent of South Africa’s exports.

Worst Quarter

Anglo American, London-based owner of the world’s largest platinum producer, fell 23 percent as cost overruns at its Brazilian Minas Rio project and the falling platinum price weighed on its profit prospects. The stock is at levels “we haven’t seen since a few dramatic days in 2008,” Wibberley said. It retreated for an eighth day, dropping 0.9 percent to 191.85 rand.

A rally in gold prices today pushed the South African index of companies that produce the metal up 5.2 percent, the first gain in nine days. It wasn’t enough to turn around a quarterly loss of 34 percent in the measure, the worst three months since at least 1995 when Bloomberg started tracking the companies.

Sibanye, which was spun off from Gold Fields Ltd. in February and contains two South African mining operations, was the all-share index’s biggest loser this quarter. The stock plummeted 47 percent to 7.10 rand.

AngloGold Ashanti Ltd., Africa’s largest producer of the metal, declined 35 percent since April 1 and traded 4.3 percent higher at 139.98 rand. Harmony Gold Mining Co. fell 40 percent over the period and was 6.8 percent higher today at 35.75 rand.

Impala Platinum Ltd., the second-largest producer of the metal, dropped 31 percent since April 1. London-based Lonmin, the third-biggest miner for the metal used in making catalytic converters for vehicles, retreated 6.2 percent over the period.