By Alec Hogg
Here’s today’s Flash Briefing:
- Shares worldwide took a hit yesterday after an unexpected intensification in trade tensions between the US and China. After months of apparent progress, US president Donald Trump tweeted on Sunday night that things had been moving too slowly and as a result, from Friday he intends ramping up tariffs on $200bn of Chinese imports from the current 10% to 25%. He intends applying a similar tariff on a further $325bn worth of Chinese goods which are currently duty free. Trade talks are scheduled to resume in Washington tomorrow. Traders took fright at the news, knocking 5.5% off the Shanghai Composite index and 3% off Hong Kong’s Hang Seng. US share prices overall lost a percentage point at the opening.
- The global softening of share prices had an impact in South Africa where dominant stock Naspers lost 3.5%, mirroring a 3% drop in the price of its major asset, Hong Kong-listed Tencent Holdings. SA’s big banking stocks were also hit by the global reverse with Standard Bank and Absa losing 2.5%, Nedbank off 2%, with FirstRand and Investec down 1%. These losses by heavyweights resulted in the all share index falling 1.3% on the session with losing shares outscoring winners by 339 to 219. Among the leaders, JSE Limited had a particularly good day, its shares gaining almost 4% to cut year-to-date losses to 11%. Retailer Spar, financial services group Old Mutual and telecoms business Telkom did best of the others, gaining around 2%.
- In the wake of a 45% slump in the Massmart share price over the past year, chief executive Guy Hayward yesterday announced he would be leaving the company before the end of 2019. Hayward has been with Massmart for 20 years, the last five as CEO. Massmart is a subsidiary of US retailing giant Walmart, which acquired the African business in June 2011 at a price of R148 a share. The stock lost 3.3% on yesterday’s news of Hayward’s departure, and now trades at R91 a share – 38% below the price where Walmart acquired its controlling stake. During the past seven years the Rand has depreciated from R8 to R14.40 against the greenback, which together with a lower share price has, in US Dollar terms, wiped almost two thirds off the value of Walmart’s investment.
- Troubled construction company Group Five, once a leading South African conglomerate, is preparing to sell its three biggest subsidiaries in an attempt to stave off liquidation. One of the company’s business rescue practitioners, David Lake, told Bloomberg yesterday the group has put its Budapest-based European highway and toll road developer Intertoll Europe on the market along with building materials company Everite and real estate developer G5 Properties. Lake said Group Five is also attempting to complete at least 65 unfinished construction projects. The good news, however, is that although the company will no longer trade under the Group Five name, Lake said most of the business units will continue independently or under new owners and thousands of jobs will be saved.
Visited 126 times, 1 visit(s) today
