S. Africa Stocks Retreat as Banks Fall; Shoprite Soars on Update

South Africa’s main stock index erases gains of as much as 0.4% to fall 0.5% by 9:40am in Johannesburg, as weakness in banks and MTN Group counter a rise in heavyweight BHP and a soaring Shoprite.

The losses come amid a resurgence in Covid-19 cases in parts of the U.S. and Europe, raising concern that the economic rebound is stalling. Risk appetite has also taken a hit amid the ratcheting up of U.S.-China tensions, with the Trump administration expected to unveil new measures shortly against Chinese-owned software deemed to pose national-security risks.

  • Weaker rand pulls index for bank stocks down 3.2% to the lowest intraday level in more than three weeks
    • NOTE: Rand in Bearish Turn as Volatility Rises: Inside South Africa
    • FirstRand -3.5%, Standard Bank -2.8%, Absa -3%, Capitec Bank +3.1%, Nedbank -3.2%, Investec -2.5%
  • MTN falls for the third day, down 2.3%.
    • NOTE: MTN Zakhele Futhi Entering Into Talks With MTN on Dividend
  • Rand-hedge Richemont shakes off weaker rand, falls 1%
  • Shoprite +7.8%, biggest intraday jump in two months, as the company publishes its trading statement
  • Naspers, with a 20% weighting on the index, rises 0.6%, as partly owned Tech giant Tencent advances in Hong Kong
    • Naspers subsidiary, Prosus, which holds the company’s 31% stake in Tencent, rises 1.2%
  • Diversified miners join gold and platinum producers to lift the gauge for mining stocks for the second day, up 0.9%
    • BHP +1.6%, Anglo American +0.6%, Gold Fields +0.8%, Harmony Gold Mining +2.2%, Sibanye Stillwater +0.5%, Northam Platinum +1%, African Rainbow Minerals +0.9%, Royal Bafokeng Platinum +1.1%, DRDGold +0.45
  • Foreigners were net sellers of South African stocks for the second day Friday, disposing of 3.1b rand worth of shares, according to bourse operator JSE. This is the largest outflow since June 10.

NEWS:

  • South African Lockdown Tax Loss Exceeds Value of Two Virus Loans
  • South Africa’s Eskom Requests Bids for Battery-Power Storage

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