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Johannesburg - The JSE's attention on Tuesday was riveted on the announcement of the massive transaction in which furniture firm Steinhoff International [JSE:SHF] will buy a 92% stake in clothing retailer Pepkor for R62.8bn.
READ: Steinhoff moves into clothes with R68.2bn Pepkor buy
Steinhoff and private equity firm Brait [JSE:BAT], which will sell its stake of 37% in Pepkor to Steinhoff for R26.4bn, were by far the busiest shares on the JSE in terms of volume and value.
No less than 9.529 million shares in Steinhoff were traded by midday on Tuesday for R540m in 4 741 transactions. Brait was the second-busiest share, with 2 708 transactions in which 6.37 million shares were sold for R465.3m.
But as the Steinhoff share price benefited from the transaction and gained 1.72% to R56.93, investors in Brait seriously cashed in their profits from this transaction and the share price dropped 15.31% by midday to R74.90.
Brait was however still 70% higher for the past year and 32% stronger for the last month. Steinhoff gained only 5.2% over the last month, but is now 38.3% stronger for the year. The company is now also close to its previous 52-week high of R59.73 set in July this year.
Steinhoff said on Tuesday morning the R62.8bn will be paid in cash and shares, and the transaction will give it exposure to the fast growing apparel market in Africa.
The biggest benefactor will be prominent businessman Christo Wiese, who will sell his stake of 52.7% in Pepkor for 600.1 million shares in Steinhoff at R57.00 per share. The value of these shares come to about R34bn and will make him a serious shareholder in Steinhoff, which have a current market capitalisation of R142bn.
The picture for the rest of the market was however not so bright, and most of the major indices were heading south again as there is still residual selling pressure.
By midday the All-share index was 0.53% lower at 50 459 while the Top 40 index lost 0.41% to 44 898.
The technical analysts of Imara SP Reid however said in their daily Market Snapshot that while Tuesday's performance may be indifferent, the improvement in rate of change and momentum figures indicates that after a modest value retracement, additional upside is likely to emerge.
Little reaction to sterling Naspers results
The Industrial index was only 0.01% lower. Investors did not react much to the excellent results of Naspers [JSE:NPN], the biggest African firm in terms of market value on the JSE. The share traded 1.29% lower at R1 492.46. It seems that most of the recent flow of good news has been discounted already.
READ: Tencent drives profit increase at Naspers
Naspers said first-half earnings increased 39% on growth in e-commerce, TV and the contribution from Hong Kong-based Tencent Holdings.
Operating profit was R2.25bn in the six months to September, compared with R1.62bn a year earlier. Revenue rose 20% to R34.36bn.
Netcare [JSE:NTC], which gained 6.9% to reach a new 52-week high on Monday on the back of a 20% profit rise, improved again by 1.64% to another high of R36.54.
The latest economic growth figures also did not have a big influence on the market.
South Africa's economy expanded at an annualised 1.4% in the three months to September after manufacturing and mining output recovered from strikes.
READ: Economy grows 1.4% in Q3
The Financial index was 0.7% lower and Imara SP Reid said that these shares are now overbought after a strong run recently. Again, the biggest losers were resources with the Resources 10-index 1.05% lower, while the Gold index lost ground for the second
consecutive day as the gold price fell back to below $1 200 per ounce.
The share price of BHP Billiton [JSE:BIL] did not respond to important announcements on Monday regarding the breakup of the company, and traded 1.71% softer at R275.41.
READ: Steinhoff moves into clothes with R68.2bn Pepkor buy
Steinhoff and private equity firm Brait [JSE:BAT], which will sell its stake of 37% in Pepkor to Steinhoff for R26.4bn, were by far the busiest shares on the JSE in terms of volume and value.
No less than 9.529 million shares in Steinhoff were traded by midday on Tuesday for R540m in 4 741 transactions. Brait was the second-busiest share, with 2 708 transactions in which 6.37 million shares were sold for R465.3m.
But as the Steinhoff share price benefited from the transaction and gained 1.72% to R56.93, investors in Brait seriously cashed in their profits from this transaction and the share price dropped 15.31% by midday to R74.90.
Brait was however still 70% higher for the past year and 32% stronger for the last month. Steinhoff gained only 5.2% over the last month, but is now 38.3% stronger for the year. The company is now also close to its previous 52-week high of R59.73 set in July this year.
Steinhoff said on Tuesday morning the R62.8bn will be paid in cash and shares, and the transaction will give it exposure to the fast growing apparel market in Africa.
The biggest benefactor will be prominent businessman Christo Wiese, who will sell his stake of 52.7% in Pepkor for 600.1 million shares in Steinhoff at R57.00 per share. The value of these shares come to about R34bn and will make him a serious shareholder in Steinhoff, which have a current market capitalisation of R142bn.
The picture for the rest of the market was however not so bright, and most of the major indices were heading south again as there is still residual selling pressure.
By midday the All-share index was 0.53% lower at 50 459 while the Top 40 index lost 0.41% to 44 898.
The technical analysts of Imara SP Reid however said in their daily Market Snapshot that while Tuesday's performance may be indifferent, the improvement in rate of change and momentum figures indicates that after a modest value retracement, additional upside is likely to emerge.
Little reaction to sterling Naspers results
The Industrial index was only 0.01% lower. Investors did not react much to the excellent results of Naspers [JSE:NPN], the biggest African firm in terms of market value on the JSE. The share traded 1.29% lower at R1 492.46. It seems that most of the recent flow of good news has been discounted already.
READ: Tencent drives profit increase at Naspers
Naspers said first-half earnings increased 39% on growth in e-commerce, TV and the contribution from Hong Kong-based Tencent Holdings.
Operating profit was R2.25bn in the six months to September, compared with R1.62bn a year earlier. Revenue rose 20% to R34.36bn.
Netcare [JSE:NTC], which gained 6.9% to reach a new 52-week high on Monday on the back of a 20% profit rise, improved again by 1.64% to another high of R36.54.
The latest economic growth figures also did not have a big influence on the market.
South Africa's economy expanded at an annualised 1.4% in the three months to September after manufacturing and mining output recovered from strikes.
READ: Economy grows 1.4% in Q3
The Financial index was 0.7% lower and Imara SP Reid said that these shares are now overbought after a strong run recently. Again, the biggest losers were resources with the Resources 10-index 1.05% lower, while the Gold index lost ground for the second
consecutive day as the gold price fell back to below $1 200 per ounce.
The share price of BHP Billiton [JSE:BIL] did not respond to important announcements on Monday regarding the breakup of the company, and traded 1.71% softer at R275.41.
