South African Stocks Slide For Second Day After IMF Cuts Growth Forecasts

South Africa’s main stocks index extended declines for a second day, falling 0.2% by 10:13 a.m. in Johannesburg, amid weakness in BHP Group Plc and Anglo American Plc as fellow benchmark heavyweights Naspers Ltd and Richemont dropped. The four stocks account for 48% of the gauge by value.

Wednesday’s weakness came after the International Monetary Fund cut South Africa’s growth forecasts, even as it raised its projection for global expansion. Stock markets are mostly treading water near record highs as investors seek more clarity on the timeline for President Joe Biden’s $1.9 trillion Covid-19 relief plan, and awaiting the Federal Reserve monetary policy decision later Wednesday.

“Global stocks are likely to trade sideways today as market participants weigh the IMF’s upward revisions to the global growth outlook against hurdles to further economic stimulus, while caution is likely to prevail ahead of the Fed’s policy statement,” Mpho Molopyane, a Johannesburg-based economist at FirstRand Group Ltd.’s Rand Merchant Bank, said in a note to clients. “Expectations are that the Fed will keep to its accommodative stance to aid with the economic recovery.”

An index of mining stocks retreated for a fourth consecutive session, down 0.7% to the lowest since Jan. 6 as China’s commitment to cutting steel production this year dragged on iron ore prices, and as platinum prices retreated.

  • BHP -1.1% to cause the biggest drag on the FTSE/JSE Africa All Share Index. Anglo American -0.9%, Exxaro Resources Ltd. -1.2%, Glencore Plc -1.8%, African Rainbow Minerals -0.7%

Platinum companies declined for a fourth session, the longest losing streak since Oct. 30

  • Sibanye Stillwater Ltd. -0.8%, Northam Platinum Ltd. -0.4%

Richemont extended declines to a the third day. Meanwhile Naspers erased gains of as much as 0.6% to fall 0.4%.

NOTE: Naspers Looks to Reduce Impact of Johannesburg Bourse Dominance

Vodacom Group Ltd. dropped 0.6% as parent Vodafone Group Plc considers options for its Ghana business as it focuses on reorganizing the group and paying down debt.

Rand weakness drags index of bank stocks lower.

  • NOTE: Rand Lags After IMF Cuts Growth Projections: Inside South Africa
  • Standard Bank Group Ltd. -0.5%, FirstRand Ltd. -0.2%, Absa Group Ltd. -0.5%, Nedbank Group Ltd. -0.4%, Investec Plc -0.3%

Industrials retreat 0.4%

  • Mondi Plc -0.3%, Barloworld Ltd. -1.2%, Kap Industrial Holdings Ltd. -1.9%

Weak rand also pulls financials down 0.4%

  • Remgro Ltd. -0.9%, Ninety One Ltd. -3.4%, Quilter Plc -0.5%, PSG Konsult Ltd. -3.8%, Transaction Capital Ltd. -1%
  • General retailers retreat 0.6%
    • Foschini Group Ltd. -1.4%, Woolworths Holdings Ltd. -0.9%, Mr Price Group -0.5%, Massmart Holdings Ltd. -2%, Truworths International Ltd. -0.5%
  • Foreigners remained net sellers of South African stocks for a fourth consecutive day Tuesday, disposing of 1.05 billion rand worth of shares, according to exchange operator JSE Ltd. That’s the largest outflow since the year started.

NEWS:

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