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Star picks up after Steinhoff’s fall
The share price of Steinhoff Africa Retail (Star) has recovered significantly following the bloodbath in December, when its value and that of Steinhoff plunged on the local bourse. Steinhoff is a major shareholder in Star, which has a market capitalisation of over R70bn, making it one of SA’s largest nongrocery retailers. Steinhoff has hardly recovered after losing 90% of its value following disclosures of corruption in its accounting processes, while Star has recovered 23.5% since January as investors’ fears about its involvement in the financial scandal wane and the outlook for its highly cash generative key operations, Pep and Ackermans, looks positive. Star went from trading at about R23 to R15 after the scandal broke. But it slowly recovered to crack the R20 ceiling. It closed 3.9% lower on Friday at R19.70. Casparus Treurnicht, a portfolio manager at Gryphon Asset Management, said Star’s recovery was based largely on "all the signs that appeared suggesting that issues inside t...
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