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Johannesburg - Investors have been spending billions of rand on the JSE on Thursday to obtain shares in Barclays Africa [JSE:BGA], after Barclays plc’s sale of shares in the local banking group went much better than expected.
Almost 18 million shares in Barclays were sold in early trade on the JSE after the London-based banking group announced that it managed to sell 50% more shares in the sale of Barclays Africa shares than originally planned.
Barclays Africa’s share price gained more than 3% in early trade, but it was not enough support the broad market as all the major indices were sharply down, including the Financial index which lost almost 1%. The Banking index was only 0.23% higher. The market was dragged down again by the Resources sector, which lost 2.28% at mid-morning.
Barclays plc previously planned to sell a 22% stake of Barclays Africa but managed to sell 285.7 million shares of Barclays Africa - equal to a 33.7% stake - at R132 each to large investors, it said in a statement on Thursday.
Investors were scrambling for more shares on Thursday and almost 18 million shares were sold in almost in 15 000 transaction in early trade for more than R2.5bn.
The Barclays Africa share price was already 3.72% higher at mid-morning at R144.17. Thursday’s price movement is in sharp contrast to that of Wednesday, when the share price dropped 4.76% to R139.00 after Barclays said it had secured approval from the South African finance minister to sell down its 50% stake in Barclays Africa.
Before Thursday’s trade the share was more than 15% softer over the previous 90 days.
The sale will raise about R37.7bn for Barclays plc, which is partly relying on funds raised from the sale to meet capital requirements identified as a concern by the Bank of England in a November stress test aimed at gauging its ability to withstand financial shocks.
It is the second such sale since the British bank in early 2016 announced its intention to offload most of its African business.
There was also a huge demand for shares in the other South African banking groups, with more than 4 000 transactions in FirstRand [JSE:FSR] shares and 3 700 in Standard Bank [JSE:SBK] changing hands. Standard Bank gained 0.16% to R146.78, but FirstRand lost 0.65% to R48.99. Nedbank was 0.73% softer at R218.50.
Insurance giants Old Mutual [JSE:OML] and Sanlam [JSE:SLM] were also in demand, but both lost ground. Old Mutual was 0.73% softer at R31.81 and Sanlam gave up 1.17% to trade at R67.83.
All the major indices on the JSE were down by mid-morning on Thursday, with the Financial index losing 0.91% . The All-share index traded 1.01% lower at 52 987 points and the Top 40 index was 1.11% weaker at 46 631 points.
The Industrial index was 0.65% lower, with Richemont [JSE:CFR] trading 1.64% lower at R109.80. British American Tobacco [JSE:BTI] lost 1.34% to R931.45 and Aspen [JSE:APN] dropped 1.68% to R292.01. Naspers was 0.37% higher at R2725.35.
According to analysts, the mood on the JSE is still uncertain in the current volatile political climate, although the rand strengthened to R13.03 against a softer dollar.
Resources shares are currently hard hit by uncertainty about the mining upcoming mining charter. President Jacob Zuma said in Parliament on Wednesday details about the charter will be released soon, but the Chamber of Mines said it has not been consulted about the details which can have far-reaching effects on the industry,
Anglo American [JSE:AGL] was the biggest loser, shedding 3.06 to R170.40 and BHP [JSE:BIL] lost 2.70% to R195.84. Before Thursday’s trade Anglo was already more than 20% down over the past 90 days and BHP lost more than 17% over the same period. Glencore [JSE:GLN] traded 2.76% lower at R47.50.
