Steinhoff lifts South African stocks, rand retreats

People walk near the reception at the Johannesburg Stock Exchange (JSE) in Sandton, Johannesburg, South Africa December 10, 2015. REUTERS/Siphiwe Sibeko
Social sharing

By Nqobile Dludla and Mfuneko Toyana

JOHANNESBURG (Reuters) – South African stocks rose on Wednesday, helped by international retail group Steinhoff after retail tycoon Christo Wiese said it would be a “natural development” to take over Shoprite.

The rand weakened more than one percent, under pressure after a recent rally as risk appetite globally was dented by firm U.S. economic data and criticism by German lawmakers of the European Central Bank’s ultra-low interest rates policy.

In an interview on Tuesday, Wiese told Reuters that he is continually looking at consolidating his business interests and so it would be a “natural development” to take over Shoprite.

Shares in Shoprite, which have been little changed so far this year, jumped 4.6 percent shortly after Reuters reported Wiese’s comments before paring gains to close 4.38 percent high at 196.25 rand.

Johannesburg-listed shares in Steinhoff, which is also listed in Frankfurt, added at least 2 percent to gains notched up earlier on news that it would issue shares to fund deals. The stock was up 6.24 percent at 80.72 rand.

“The market likes clarity on the way forward and if Christo Wiese is thinking there could be a future where Steinhoff and Shoprite will be together, it will be good news for Shoprite shareholders,” said Cratos Capital equities trader Greg Davies.

The benchmark Top-40 index rose 1.89 percent to 45,234 while the All-share index was 1.72 percent higher at 51,773.

On the forex market, by 1515 GMT the rand had slipped 1.5 percent to 13.6750 per dollar from an overnight close at 13.4725 as the strong demand for high-yield assets that propelled the local unit to one-month highs ebbed.

READ ALSO  BREAKING!! Imo State Deputy Governor Impeached(Happening Now)

Earlier the rand had looked likely to test technical resistance at 13.30, with demand boosted by the imminent shareholder approval of the ABI-SABMiller merger, but better-than-expected U.S. durable goods sales data stalled its rise.

“Since Friday the rand has been strengthening so it was due some sort of pullback on a technical perspective,” said market analyst at Rand Merchant Bank Gordon Kerr.

The yield on South Africa’s benchmark 2026 bond rose 2.5 basis points to 8.64 percent, with losses stemmed by the Treasury’s confirmation that it would launch two new dollar-denominated bonds.

(Editing by Catherine Evans)

 

Leave your comment on this post
About 9News Nigeria 11282 Articles
9News Nigeria is Nigeria's favourite news source. For Authentic, Unbiased News on Politics, Business, Sports, Technology, Entertainment and Lifestyles, Health, Nollywood, Crime and Investigations, Family and Relationships, Inspirations .. and much more. For Latest News from Africa and around the world, 9News Nigeria is your best source. WhatsApp +2348115805632 Email: info@9newsng.com Facebook: www.facebook.com/9NewsNG | Twitter/Instagram: @9newsng

Be the first to comment

Leave your comment