JOHANNESBURG – South Africa’s general retailers index posted its biggest daily loss in nearly two weeks on Monday, capping gains on the bourse after ratings downgrades last week knocked the rand currency, raising the prospect of inflation curbing consumption.
The rand extended its recent losses as the credit downgrades to “junk” by two ratings firms last week following the sudden firing of the finance minister kept investors jittery.
The general retailers index shed 2.77 percent on Monday, bringing its decline to around 12 percent since March 27 when President Jacob Zuma recalled finance minister Pravin Gordhan from an overseas investors roadshow, before firing him in a cabinet reshuffle.
Massmart, majority-owned by Wal-Mart Stores Inc, lead the way, falling 4.85 percent.
“It looks like people are starting to realise that these downgrades will cause the economy to slow down, that’s generally a negative for retailers,” said Cratos Capital equities trader Greg Davies.
Overall, the market closed higher. Advancers included Anglo American, which closed 1.6 percent higher after announcing it would sell its Eskom-linked thermal coal operations in South Africa for $166 million, marking an important step in strategic overhaul to sharpen its focus.
The broader All-Share index increased 0.54 percent to 53,139.86 points, while the benchmark Top-40 index added 0.73 percent to 46,422.49 points.
On the foreign exchange market, at 1600 GMT the rand traded at 13.9200 per dollar, 1.07 percent weaker from its New York close on Friday.
In fixed income, the yield for the benchmark government bond due in 2026 climbed 7.5 basis points to 9.005 percent.
Facebook Comments