MARKET WRAP: JSE flat despite Steinhoff recovery, with banks faring worst
The JSE was little changed on Monday, as banks and most retailers came under pressure, while companies recently hit by corporate governance scandals showed signs of recovery.
Retailer Steinhoff surged 55.83% to R9.35, after it moved on Sunday to reassure investors by appointing management consultants and rescheduling meetings with its bankers. The group has lost 86.88% so far this year, amid allegations of accounting irregularities.
Steinhoff would probably not collapse, but it seemed likely that its recovery would be very slow, said Vestact analyst Paul Theron.
Technology group EOH rose 20% in intraday trade‚ but pared some of those gains to close 8.54% higher at R51.48. The group lost 40.64% last week and attributed this to "involuntary trading" due to forced sales of its shares by financial institutions.
Some of its subsidiaries, however, face allegations they paid kickbacks, and the group earlier appointed law firm ENS Africa to conduct a full fact-finding review of some of the group’s investments.
Global markets were mixed, with investors waiting for direction from central bank monetary policy statements this week.
The all share closed 0.03% off at 57‚997.30 points while the blue-chip top 40 gained 0.08%. Banks shed 2.72%‚ food and drug retailers 1.56%‚ general retailers 1.4% and financials 1.1%. The gold index added 1.47% and resources 1.27%.
Anglo American gained 1.14% to R250.89.
Barclays Africa shed 4.13% to R150.50 and Standard Bank 2.82% to R171.44.
Investec plc gained 2.32% to R86.97. The group said earlier it had credit exposure to Steinhoff‚ but was not expecting any losses.
Sanlam dropped 1.87% to R76.62. The group has exposure to Steinhoff bonds.
Steinhoff Africa Retail shed 4.23% to R16.76.
Shoprite lost 2.01% to R212 and Pick n Pay 2.05% to R64.89.
Nepi Rockcastle added 0.98% to R213.
Life Healthcare dropped 2.67% to R25.86.
At 5.40pm the Dow was flat. European markets were mixed‚ with the FTSE 100 up 0.74%‚ while the CAC 40 had lost 0.13% and the DAX 30 0.12%.
At the same time Brent crude was up 1.36% to $64.17 a barrel‚ while platinum had fallen 0.25% to $886.92 an ounce and gold 0.06% to $1‚247.23.
The top-40 Alsi futures index gained 0.13% to 51‚902 points. The number of contracts traded was 19‚930 from Friday’s 22,517.