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SA stocks slump in risk-off mood; upbeat MTN surges

MTN surged after the mobile carrier gave an upbeat assessment of first-half performance.
Image: Waldo Swiegers/Bloomberg

South Africa’s main stock index retreats 1.2% to its lowest level in more than a week as of 9:30 a.m. in Johannesburg, after the government closed schools for a second time in the face of rising Covid-19 infections. The equities benchmark is down 1% since Monday, set to decline for the first week in four. MTN Group Ltd. surged after the mobile carrier gave an upbeat assessment of first-half performance.

The announcement on schools came hours after the South African Reserve Bank cut its benchmark interest rate for the fifth time in 2020 and said it sees the economy contracting by 7.3% this year, even more than its previous estimate.

Global risk-off sentiment also took a hit amid rising concern over escalating Sino-US tensions. China on Friday ordered the US to close its consulate in the southern city of Chengdu, in retaliation to Washington’s decision forcing China to leave its mission in Houston earlier this week.

Investors are also concerned that recovery in the world’s largest economy has stalled, with US jobless claims rising for the first time since March.

Naspers Ltd., with a 19% weighting on the index, falls 3.1% to provide biggest drag to the index, as partly owned internet giant Tencent Holdings Ltd. retreats in Hong Kong.

  • Gauge of mining stocks falls 1.6%, as diversified miners and gold producers drop
    • BHP Group Plc -0.9%, AngloGold Ashanti Ltd. -3.1%, Anglo American Plc -1.3%, Gold Fields Ltd. -2.6%, Sibanye Stillwater Ltd. -2.7%, Impala Platinum Holdings Ltd. -2.3%, Anglo American Platinum Ltd. -2.1%
  • Index of bank stocks retreats 0.6% as the rand weakens
    • “Rand struggles badly on global risk-off, but EUR/USD gains and the details behind the SARB decision are at least positive,” said Matete Thulare, a Johannesburg-based analyst at Rand Merchant Bank, in a note to clients. “In all, the rand’s appreciation trend has been seriously damaged, and it will take time to resume.”
      • Capitec Bank Holdings Ltd. -1.5%, FirstRand Ltd. -0.3%, Standard Bank Group Ltd. -0.1%, Absa Group Ltd. -0.4%
  • MTN Group Ltd. advances 6.1% to provide biggest boost to the benchmark index, as company says it sees headline earnings for the six months through June at least 195 cents or 100% higher than a year earlier.
  • Foreigners were net sellers of South African stocks Thursday, disposing of R554 million worth of shares, according to exchange operator JSE Ltd.

© 2020 Bloomberg

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“Forecast to shrink the most in 90 years” and all the President can do is gently assure the nation that corruption in the COVID funding process will be severely dealt with?

Meanwhile, the most corrupt or perhaps corrupted, Jacob Zuma will be delivering the eulogy at the funeral of the last Rivonia Trial accused Andrew Mlangeni a man of principles and ethics who openly criticised the corruption in the ANC.

Sigh …

I’ve tried leaving a valid comment but once again I’m being held back. Why? Is there some political implication?

Because I described Jacob Zuma as corrupt?

End of comments.

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