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Johannesburg - Naspers [JSE:NPN], by far the biggest share on the JSE and with a massive influence on the industrial index, pulled the local market lower on Monday.
Naspers was a victim of a global sell-off in electronic stocks. The sell-off started on Wall Street on Friday on concerns about Apple's new iPhones and a cautious Goldman Sachs report about the stocks, which prompted heavy profit taking after an extended rally.
Asian stocks fell on Monday, with electronics heavyweights knocked lower by the slide in US tech shares. One of the Asian heavyweights losing ground was Tencent, the Chinese internet giant in which Naspers holds a stake of 34%. This represents by far most of Naspers’s income and market value.
By mid-morning Naspers was already 4.47% lower at R2 563 per share after Tencent went down 2.45% to HK$270.60 per share on the Hong Kong Stock Exchange. Naspers’s share price was at Monday morning’s level already 7.8% lower than the all time high of R2 804.50 reached on 25 May this year.
The result was that the industrial index, which includes most of the big dual-listed companies on the JSE, was by mid-morning already 1.38% lower at 78 215 points. The index is already more than 5.5% lower than the all time high of 82 828 points reached on 21 May this year.
The result was that the All-share index lost 0.83% to 51 783 points in early morning trade and the Top 40-index was already 1.06% lower at 45 389 points.
The market and the industrial index were also pulled lower by the weak market in London, where most of the big dual-listed shares - which represent more than half of the JSE’s market value - are listed.
European markets are still uncertain about the surprising outcome of last week’s British election. These markets are currently moving sideways, seeking fresh catalysts to extend a rally that reached the highest level in two years in May.
More negative news
More negative news on the local economic front, including shockingly poor growth figures last week, as well as the news that Moody’s lowered its credit rating of South Africa with one notch, also put a damper on the local market.
These events have a negative effect on the shares of companies which are doing business mainly in South Africa, including financial institutions. The financial index was, however, 0.21% higher after opening lower. The financial index has lost more than 7% since the shock cabinet reshuffle in March when president Jacob Zuma fired then finance minister Pravin Gordhan.
Barclays Africa [JSE:BGA] was one the busiest shares on the JSE, but traded unchanged at R146.40 per share. FirstRand lost 0.44% to R47.05 per share and Sanlam [JSE:SLM] was 0.72% softer at R66.54 per share. Santam [JSE:STM], the only short term insurer which is directly listed on the JSE, gained 0.42% to R210.00 per share.
Short term insurers face huge claims after the devastating fires in Knysna and Plettenberg Bay.
Prominent food retailers such as Pick n Pay [JSE:PIK] are also currently trading at 52-week lows and lost further ground on Monday. Pick n Pay lost another 0.28% to R56.64 per share after losing more than 5% last week and more than 10% over the previous thirty days.
Woolworths [JSE:WHL] was 1.64% lower at R63.38 per share and is now more than 11% lower than a month ago.
The resources index was 0.40% lower due to a slightly stronger rand which traded at R12.89 to the dollar after dropping to R12.83 to the dollar on Friday after the Moody’s announcement.
Platinum
There was a lot of interest in platinum shares with Anglo American Platinum [JSE:AMS] gaining 6.11% to R311.69 per share. The interest in the share started last week as it gained 7.28% over the previous seven days.
Implats [JE:IMP], which lost almost 20% of its value as investors responded negatively to the terms of the company’s proposed rights issue, continued on its recovery and traded another 0.49% higher at R36.88 per share. The share gained almost 5% last week.
Lonmin [JSE:LON] is, however, still in the doldrums and lost another 2.31% to reach a new 52-week low of R11.51 per share.
Sibanye [JSE:SGL], which lost almost half of its value after the company announced it will issue new shares at a huge discount to finance the acquisition of the Stillwater platinum mine in the United States, is also on the comeback trial. The share traded 2.89% higher at R17.51 per share after it gained 10.88% over the previous seven days.
Harmony [JSE:HAR] was, however, 4.29% lower at a new 52-week low of R24.25 per share.
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