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Murray & Roberts tumbles amid Sanral damages claim

May 10 2016 12:35
Neo Khanyile

Johannesburg - Murray & Roberts Holdings, South Africa’s second-largest construction company, fell for a sixth day in its longest losing streak since September after the South African National Roads Agency (Sanral) lodged a claim for damages against companies for colluding in road-building contracts.

The Johannesburg-based company’s stock fell as much as 4.7% before trading 0.8% lower at R12.60 as of 13:11 GMT in Johannesburg. The share has fallen 15% in the last six days, its longest stretch of declines since September 29, paring this year’s gain to 57%. Basil Read Holdings Ltd., another road builder, fell as much as 5.5% in a third day of losses before trading unchanged at R3.65.

Sanral lodged the claims of between R600m ($39m) and R760m against seven builders in the High Court in Gauteng, it said on Monday, without naming the companies.

The court filing comes almost a year after Sanral said it planned to sue builders following an investigation by South Africa’s antitrust body in 2013, which fined 15 companies for collusion over contracts to build stadiums for the 2010 FIFA Soccer World Cup.

“All the construction stocks will come under pressure due to the civil case implemented by Sanral,” Bruno van Eck, a trader at Johannesburg-based Thebe Stockbroking, said by e-mail. Murray & Roberts and Basil Read are among companies that may face fines, he said.

The FTSE/JSE Africa Construction & Materials Index fell less than 0.1%. The gauge is up 5.5% so far this year, compared to a 1.2% gain in the benchmark FTSE/JSE Africa All Share Index.

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