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Stocks dip, Nampak logs biggest drop in 18 years

Kumba Iron Or was one of the few stocks that gained thanks to higher iron ore price.

South Africa’s main stock index ended sharply lower on Tuesday, with Nampak topping the decliners’ list after the continent’s biggest packaging firm reported lower half-year earnings.

Nampak posted an 8% fall to 101 cents in first-half headline EPS, citing production decline at its glass unit and pressure on consumers’ disposable income in South Africa.

In reaction, shares in the company plunged 13.3% to R36.40, a level last seen nearly a year ago and booking their biggest one-day drop in 18 years.

“People are becoming more price sensitive now and unfortunately for Nampak if the economy in South Africa is not growing, their products are also not being sold,” said Owen Nkomo market commentator of Inkunzi Investments.

Overall, investors dumped equities worldwide as Greece’s financial crisis and signs of growing opposition in Spain knocked confidence.

Johannesburg’s blue-chip Top-40 index dropped 1.94% to 46,916. The wider All-share shed 1.89% to 52,963.

AngloGold Ashanti also fell by 2.48% to R115.96 as gold dropped to a two-week low.

Kumba Iron Ore, up 1.9% at R151.37, was one of the few stocks that gained thanks to higher iron ore price.

Activity was robust with more than 227 million shares traded, well above last year’s daily average of 183 million. 

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