COMPANY COMMENT
Leaky sieve probably behind Dis-Chem slide
Perhaps Dis-Chem will rethink its failure to issue voluntary updates in the future
Dis-Chem’s explanation for its initially mysterious share price fall — a not inconsiderable 5.6% on Thursday, ahead of its results — is entirely plausible. Traders awaiting confirmation that this retail go-go share would deliver the goods — more than 20% in earnings growth — were clearly on the wrong end of the trade and, knowing so, pushed the stock down when it failed to issue an update. Companies are obliged to issue an update as soon as they know that earnings will move by a margin of 20%, either positively or negatively. However, it’s now customary that South African corporations issue voluntary updates, irrespective, and perhaps Dis-Chem will rethink its failure to do so in future. Chalk that down to naivety, or bad advice, but it’s a mistake it would do well not to repeat. But back to the trading action: not all brokers are convinced that the lack of an update was the cause of Dis-Chem’s wobble. Rather, it was more likely that someone had sight of the results and talked. They...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.