Retailers show signs of recovery as interest rates ease
THE all-share index gave up a net 31 points to 5 622 as trading lost direction in the latter part of the week. Although the market was down by more than 1% on Friday, it closed off its lows as golds recovered a touch. The all-gold index gave up 7% to 1 046 over the week as the dollar price drifted into the lower $290s.
Retailers showed patches of recovery as interest rates now seem to be coming down. Both Pep and Pepkor had good rises. Pepkor has 94% of Pep and is to take out the minority with 40 Pepkor per 100 Pep. Pep climbed from 650c to 860c and Pepkor picked up 125c to R23 after going higher. AMMoolla jumped from 66c to 90c after an offer to the minority from Coastal Group 16 Coastal per 100 AMM or a preference-share option. Coastal gained 18% to R10.25, making AMM look cheap.
Following the crash, interest in small capitalisation stocks diminished and there are still a few pockets of value to be tapped. Premier Group climbed by 11c to 126c on news that it is close to distributing R1.1-billion in cash to shareholders. This is about 107c a share, and about R450-million worth of assets remain, so Premier is still undervalued.
Among financials, Cusaf enjoyed the largest jump, up by two thirds to R17.25 on the sale by Gold Fields of SA of its 22% stake to Metropolitan Life and a cautionary that negotiations were under way, probably to buy out the UK shareholders. The tightly held Cusaf has been a protected underperformer and punters hope for better. Metlife shed 30c to R10.60. All the Coronation shares were strong, as was African Life and Real Africa.
Investec's earnings growth was as predictable as ever and the share collected 7% to R188.20 before falling to R184.80. Expectations in general are for a tough period for financials. Brait announced maiden results 65% higher than the pro forma comparison, the share added nearly R3 or 12% to R27.80. Barnard Jacobs Mellet showed a 76% improvement in earnings, the share edged up 25c to 565c.
GFSA, which also sold Zincor to Iscor this week, traded in its unbundled form after passing on its holdings in Gold Fields Ltd and Standard Bank Investment Corporation (Stanbic). GFSA closed at R10.80. Market talk is that Liberty Life is interested in any unsolicited Stanbic shares new holders such as Gencor find themselves with. Stanbic gained 120c to R16.60, Liberty shed 100c to R92 and Gencor 65c to R10.
Haggie picked up 220c to R17.70; major shareholder Amic warned of negotiations with the engineering group.
Sappi pined for a New York listing and will get one this week; the share price added 115c to R22.25 after going higher. Vestacor, which is to pass on 9.5 shares in new listing Value Group per 100, added 47% to 25c. AECI slipped by 70c to 945c as the group announced an extensive restructuring to unlock value.
There were 13 cautionaries and one withdrawal - Molope cancelled negotiations and immediately shed 30c to 550c.