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Johannesburg - Steinhoff’s share price stopped the bleeding on the JSE on Friday morning, after the company took steps to refute the allegations which led to a bloodbath on Thursday.
The share was 1.69% higher at R60.60 at mid-morning after it dropped more than 16% at one stage on Thursday. This was in response to a magazine article in Germany, which claimed that German prosecutors are investigating at least four individuals associated with the retailer, including group chief executive Markus Jooste, for suspected balance sheet fraud.
Trading in the stock was brisk again with more than 8 million shares being traded for R500m, after a massive 75 million shares were traded on Thursday for more than R4.5bn.
The share price started to turn around on Thursday evening shortly before the market’s close after the company rejected the allegations of dishonesty, stating that the allegations made by the magazine are wrong or misleading.
The sharp drop in Steinhoff's share price did not prevent the major indices on the JSE from trading at new record levels on Thursday, and the record-breaking run continued on Friday.
By mid-morning the All-share index was 0.45% higher on a new all-time high of 56 844 points, which means it is now more than 11% higher than its level of 50 653 points at the beginning of the year. The index gained almost 7% over the previous 30 days. The Top 40 index was 0.47% stronger on another record of 50 339 points.
The major indices were mainly driven by resources and financial shares. The Resources index traded 1.22% higher after it gained more than 8% over the previous 30 days. It started the year at 32 109 points and is now more than 10% higher at 35 312 points.
The Financial index also traded at a new 52-week high after it gained 0.24% to 43 139 points. This means the index has made up all the losses it suffered after Pravin Gordhan was fired as minister of finance earlier this year. Before President Jacob Zuma’s controversial decision, it stood at at 42 463 points, dropping to 39 356 points shortly after the announcement.
The Financial index gained more than 5% over the past month and big financial shares such as Standard Bank [JE:SBK], FirstRand [JSE:FSR], Rand Merchant Bank Holdings [JSE:RMH], Capitec [JSE:CPI] and Sanlam [JSE:SLM] are all trading at 52-week highs.
Financial shares received support from the stronger rand, which on Friday traded at R13.15 to the dollar. Standard Bank was 0.91% higher at R168.31 and FirstRand 0.53% stronger at R57.31. Capitec gained 0.43% to set a new intraday high of R889.43, and RMB Holdings added 0.72% to R681.19.
Sanlam was only 0.14% higher but it was enough to reach a new 52-week high of R72.52. The share gained 4.5% over the past week and more than 9% over the past month.
Resources shares are supported by higher metal prices, as reports indicate that Chinese steel manufacturers are increasing production.
Anglo American [JSE:AGL], which is already more than 19% higher over the past month, traded 0.94% higher at R227.15 and BHP [JSE:BIL] was 2.37% stronger at R245.00. Glencore [JSE:GLN] was 0.65% higher on a new 52-week high of R60.06.
Kumba Iron Resources [JSE:KIO], which before Friday’s trade was more than 15% higher over the past month, gained 4.9% to R203.35.
The iron ore price is now about 50% higher than its 2017 lows and has gained almost 47% over the past two months.
The Industrial index was only 0.22% higher, with Naspers [JSE:NPN] 0.08% stronger at R3 019.80.
Shoprite’s [JSE:SHP] ties with Steinhoff did not affect the share price. The share was 0.98% higher on a new 52-week high of R221.50 after strong results earlier this week. Woolworths [JSE:WHL], which announced its first profit fall in eight years on Thursday, traded lower for the second day and dropped 3.8% to R62.37.
