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MTN, Vodacom drag down JSE after regulator's ruling

February 3, 2014

Sentiment was also bruised after the central bank hiked its benchmark rate by half a percentage point, increasing concern that cash-strapped consumers would come under further pressure. The benchmark Top40 index fell 0.27 percent to 40 974.52 points. The broader all share index gave up 0.35 percent to 45 564.62 points. Shares of MTN dropped 4.2 percent to R196.50, while Vodacom declined 4.4 percent to R116.95. The communications regulator said it would halve the costs they could charge rivals to use their networks from March, to increase competition in the industry. The move is likely to benefit smaller players such as Telkom at the expense of MTN and Vodacom . "It's probable that the smaller operators are going to become more aggressive on pricing in the next three years as they are going to have a bigger advantage," Greg Cort , an analyst at asset manager Electus , said. The SA Reserve Bank yesterday raised its benchmark rate by half a percentage point to 5.5 percent, keeping in step with attempts by Turkey and other emerging markets to shore up their currencies. But the move also increased worries about pressures on consumer spending. Retailer Shoprite lost 2.7 percent to R145.50 and Truworths dropped 1.9 percent to R74. Anglo American Platinum (Amplats) rose 5.2 percent to R458, the biggest one-day gain since September, after reporting a 25 percent rise in quarterly production. Separately, Amplats and two of its smaller rivals made a revised wage offer to striking miners. The Association of Mineworkers and Construction Union is due to put the offer to its members today following the conclusion of government-brokered talks to end the crippling strike. The Mercury

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Source: Mercury, The (South Africa)

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