South Africa’s Sasol Is the Worst Emerging-Market Stock This Week
South Africa’s Sasol Is the Worst Emerging-Market Stock This Week
It has been a week of steep drops for some emerging-market stocks, but Johannesburg-traded Sasol Ltd. has out-plunged its peers, battered by the crash in oil prices and concern among investors of a potential looming rights offer as it grapples with a debt burden of about $8 billion.
Shares in the fuels and chemicals producer, South Africa’s biggest company by sales, have lost 66% since the week started, the most among the 1,401 members of the MSCI Emerging Markets Index, which is down 6.2%. The latest slump has dragged the stock to levels last seen in early 2001.
Sasol delayed an investor call scheduled for Tuesday until March 17, noting that its oil-price exposure for the rest of the fiscal year is not hedged. While the company had assumed oil will stay in a range of $50 to $70 a barrel, Brent crude traded around $36 on Wednesday.
The stock fell 26% in Johannesburg, valuing the company at 32 billion rand ($2 billion). The yield on its $750 million of notes due in 2028 climbed for a sixth day to a record 6.97%.
Sasol’s 0.6% weighting in the benchmark Johannesburg index has limited its impact on the overall market. Among emerging markets, Poland’s WIG 20, Russia’s dollar-denominated RTS Index and Saudi Arabia’s Tadawul All Share Index have been the worst performers this week, falling at least 12%, while South Africa’s gauge has dropped about 5.7%.
To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net
To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, John Viljoen, Beth Mellor
©2020 Bloomberg L.P.