Sasol plunges again, bringing losses for the week to more than 72%
Latest slump drags stock to levels last seen in early 2001
11 March 2020 - 19:09
byFilipe Pacheco
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
It has been a week of steep drops for some emerging-market stocks, but Johannesburg-traded Sasol has out-plunged its peers, battered by the crash in oil prices and concern among investors of a potential looming rights offer as it grapples with a debt burden of about R129bn.
Shares in the synthetic fuel and chemicals producer, SA’s biggest company by sales, have lost more than 72% since the week started, the most among the 1,401 members of the MSCI Emerging Markets Index, which is down 5.6%.
The latest slump has dragged the stock to levels last seen in early 2001. Sasol delayed an investor call scheduled for Tuesday until March 17, noting that its oil-price exposure for the rest of the fiscal year is not hedged.
While the company had assumed oil would stay in a range of $50 to $70 a barrel, Brent crude traded just above $36 on Wednesday. The stock closed 26.44% to R52.72, valuing the company at R33bn. At its highest recorded price, which came in June 2014, it had a market cap of more than R400bn.
The yield on its $750m (R12.112bn) of notes due in 2028 climbed for a sixth day to a record 6.93%. Sasol’s 0.6% weighting in the JSE’s benchmark index has limited its effect on the overall market. Among emerging markets, Poland’s WIG 20, Russia’s dollar-denominated RTS index and Saudi Arabia’s Tadawul all share index have been the worst performers this week, falling at least 12%, while SA’s gauge has dropped about 5.7%.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Sasol plunges again, bringing losses for the week to more than 72%
Latest slump drags stock to levels last seen in early 2001
It has been a week of steep drops for some emerging-market stocks, but Johannesburg-traded Sasol has out-plunged its peers, battered by the crash in oil prices and concern among investors of a potential looming rights offer as it grapples with a debt burden of about R129bn.
Shares in the synthetic fuel and chemicals producer, SA’s biggest company by sales, have lost more than 72% since the week started, the most among the 1,401 members of the MSCI Emerging Markets Index, which is down 5.6%.
The latest slump has dragged the stock to levels last seen in early 2001. Sasol delayed an investor call scheduled for Tuesday until March 17, noting that its oil-price exposure for the rest of the fiscal year is not hedged.
While the company had assumed oil would stay in a range of $50 to $70 a barrel, Brent crude traded just above $36 on Wednesday. The stock closed 26.44% to R52.72, valuing the company at R33bn. At its highest recorded price, which came in June 2014, it had a market cap of more than R400bn.
The yield on its $750m (R12.112bn) of notes due in 2028 climbed for a sixth day to a record 6.93%. Sasol’s 0.6% weighting in the JSE’s benchmark index has limited its effect on the overall market. Among emerging markets, Poland’s WIG 20, Russia’s dollar-denominated RTS index and Saudi Arabia’s Tadawul all share index have been the worst performers this week, falling at least 12%, while SA’s gauge has dropped about 5.7%.
Bloomberg
Investors worried that debt-stricken Sasol may need to hold rights issue
Sasol may need a cash injection as shares extend record losses
Sasol’s share price collapse wipes out R47bn in value
EDITORIAL: One certainty in the uncertainty: there’s more pain ahead
MARK BARNES: Virus is a reminder that we need to attract capital to projects, not markets
Traders brace for more volatility as virus and oil push JSE to worst one-day performance since 2008
Sasol shares lose 6% as outlook gets gloomier
Companies in this Story
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.
Most Read
Related Articles
Covid-19, tumbling oil prices could trigger capital exodus from Africa, Fitch ...
Oil prices plunge to lowest in more than four years
Sasol share hits 15-year low as the bad times roll on
Shortcomings of leadership behind Sasol’s fall from former glory
Sasol starts 2020 with a bang and a cracker
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.