Steinhoff shares leap nearly 30% amid reports of interest in Cofel and Pepco
Steinhoff shares jump as much as 27% in Frankfurt, extending two-day surge to 53%, and rising to the highest intraday level in almost six months.
Steinhoff’s Johannesburg-traded shares jumped as much as 34% on Tuesday after 20% gain Monday.
Gains follow reports of separate interest in Cofel, which is half-owned by the South African retailer, and its Pepco business, which runs Poundland stores in the UK.
“I do think the sale is positive,” said Michele Santangelo, a money manager at Independent Securities.
“The market is looking at how much tangible value can be realised from Steinhoff’s holdings. The cash realised will provide some relief to the working capital requirements and huge debt burden Steinhoff has.”
The stock’s 14-day relative strength index has risen to 91. A level above 70 is seen by some technical analysts as a sign that the shares may have risen too far, too quickly; rising for a fourth day, longest winning streak since August.
“I am not sure if this bounce in share price is justified,” said Casparus Treurnicht, a money manager at Gryphon Asset Management in Cape Town.
The deal “is not big enough to move the needle from what I’ve gathered. But perhaps it is a vote of confidence that Steinhoff is continuing to cut off loss-making enterprises and focusing on its restructuring efforts.”