JSE slumps as general retailers crash on Mr Price update
Mr Price plummets 12%, dragging down other retailers, while all other indexes are also lower in morning trade
The JSE suffered broad-based losses on Thursday morning after Mr Price’s share price crashed, dragging down other general retailers.
At 10.15am the general retailer index had plummeted 7.99%, putting it on track for its worst daily loss in years.
The all share was down 1.16% to 53,161.6 points and the top 40 1.19%. Food and drug retailers were down 3.24% and industrials 1.51%.
Mr Price plummeted 13.28% to R224.72 after saying in a sales update for the December quarter — the third quarter of its financial year — that retail sales grew a pedestrian 1.9% year on year. Retailers had been relying on the festive season, and Black Friday, to bolster their bottom line.
“This is a big miss for Mr Price, showing that events of last year such as fuel price increases and VAT increases are finally starting to weigh,” said Avior Capital Markets retail analyst Atiyyah Vawda. Discretionary spending available to consumers is now next to nothing.
Truworths slumped 9.58% to R80.55, Woolworths 8.14% to R50.45 and TFG 7.35% to R157.50.
Shoprite lost 5.13% to R158.65.
Telkom plummeted 6.22% to R63.29 and Vodacom 3.27% to R131.93.
Gold was flat at $1,292.22/oz while platinum lost 0.88% to $800.50/oz.
Brent crude was 0.67% lower at $60.91 a barrel.
Local focus is squarely on the Reserve Bank interest rate decision, due at 3pm. The Bank is widely expected to keep rates on hold.
Some focus is also on Brexit developments, after UK Prime Minister Theresa May narrowly won a no-confidence vote against her in the UK Parliament. May now has until Monday to come up with a new Brexit deal, after her draft deal was rejected by British legislators earlier in the week.