Fin24

Richemont drives JSE to new record

2012-11-01 17:00

Johannesburg - The JSE's benchmark Top-40 index hit a new record high on Thursday led by Swiss luxury goods group Richemont [JSE:CFR] which surged after a ratings upgrade.

The index rose just over 0.3% to touch 33 131.44, topping its previous high of 33 129.06 set on Wednesday.

Richemont shares surged 4.69% to R59.20    on the JSE, while also boosting European stock markets with a 5.5% surge in the share price after Bank of America Merrill Lynch raised its rating on the stock to “buy” from “underperform”.

The increase in Richemont’s share price also lifted rival LVMH, which rose 3.2%, and those two stocks contributed to some of the biggest points gains on the FTSEurofirst 300 index.

Central Markets senior trader Joe Neighbour said he had followed the general positive investor sentiment towards European equities.

However, he was more cautious on the luxury goods sector, since the industry is heavily reliant on consumer demand in China, which has shown signs of a slowdown in growth.

“The luxury goods companies have had a very good run, but if China does start to feel the pinch, then they may find it hard to repeat that performance over the next 12 months,” he said.