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Johannesburg - Richemont [JSE:CFR], one of the biggest shares on the JSE, shed more than 5% on Friday in early trade in response to a 14% drop in operating profit for the year until the end of March.
This pulled the Industrial and overall indices lower. By mid-morning the Industrial index was already 0.45% down and that led to the All-share index losing 0.23% to 53 988 points. The Top 40 index was at that stage 0.24% lower at 47 374 points.
Before Friday’s trade, Richemont’s share price gained more than 13% over the past month and more than 26% over the past 90 days. As recently as last week, the stock traded at a 52-week high of R116.10. On Friday, however, it was 5.19% lower at R108.22 by mid-morning as investors decided to take profits. It also dropped more than 5% in Europe.
Richemont was one of the busiest shares on the JSE, with more than 6 million being sold in the first two hours of trading.
The company said the past year was affected by a drop in demand, particularly for watches, and shifting consumption patterns. Sales were 4% lower. Significant steps to address the challenges, including inventory buy-backs and changes to manufacturing and cost structures, had a negative influence on short-term financial performance, but will ensure Richemont is well positioned for the future.
The company said the second half of the year saw an improvement overall, with strong growth in China which is now the group’s second biggest market. The dividend was increased by 6%.
Trade on the JSE was again influenced by the stronger rand, which traded at R13.40 to the dollar in line with other emerging market currencies.
Resources shares were therefore unchanged despite a recovery in metal prices, while the Financial index gained 0.26% with all the major banks trading modestly higher, except Standard Bank [JSE:SBK] which was 0.26% lower at R147.81.
Naspers [JSE:NPN] was once again the star of the show and traded 1.79% higher to set yet another all-time high of R2 728.10. The share is now more than 20% higher over the past month.
Naspers is supported by its interest of 34.4% in the Chinese internet giant Tencent, which represents a major part of the group’s market value and profits. Tencent’s share price gained 1.41% on Friday to HK$258.20 and is just below its all-time high of HK$259.20. A year ago Tencent's share price was only HK$153.40.
Telkom [TKG] was also on the forefront on Friday, gaining 5.01% to R82.31. Its subsidiary BCX (formerly Business Connexion) said this week that it will invest R60m in skills development over the next three years. The money will be pumped into WeThinkCode to more than double the number of entry-level coders in the South African market by the end of 2018. Before Friday's gains Telkom was already almost 9% higher over the past month.
MTN [JSE:MTN] traded 0.17% lower at R120.59 and Vodacom [JSE:VOD] lost 0.19% to R151.89.
