JSE closes lower as Nigerian claims hit MTN and Standard Bank

After 10 consecutive days of gains, which saw the JSE reach 60,000 points, the market slumped on Thursday as global investors again retreated from risk assets.

General retailers and industrials led the losers amid adverse corporate news affecting some blue-chip companies. Renewed dollar strength reflected negative emerging-market sentiment, now affecting Argentina, while the Turkish lira slipped a further 5%.

MTN and Standard Bank ended the day sharply lower after the Nigerian central bank claimed $8.1bn back from the mobile operator, and slapped the bank with a fine of $5.2m. The Central Bank of Nigeria alleges that MTN repatriated the money illegally, with the assistance of Standard Bank and other financial institutions.

MTN lost 19.41% to R86.50 and Standard Bank 2.39% to R185.

Naspers closed 6.42% lower at R3,350, amid weaker Asian markets, as concern over the ongoing trade war between China and the US remains elevated.

Local retailers were hard hit by producer price inflation numbers, coming in at a higher 6.1% in July from 5.9% in June, due, in the main, to higher oil prices.

Brent crude was up 0.22% to $77.50 a barrel at the JSE’s close. Higher oil prices and the weaker rand signal the possibility of higher interest rates.

Mr Price closed 4.44% lower at R229.12, despite a relatively upbeat trading update. The group’s retail sales and other income grew 7.4% to R7.4bn in the first 18 weeks of its 2019 financial year.

Woolworths shed 2.45% to R52.50.

Emerging markets reeled after Argentina raised interest rates by 15 percentage points to 60%. In Turkey, the country’s central bank has steadfastly refused to officially hike rates, placing the lira under renewed pressure.

The problems in emerging markets are in stark contrast to the burgeoning US economy. So far this week, the dollar has been boosted by an update on second-quarter GDP showing growth of 4.2%, which was slightly better than the initial reading of 4.1%. Also, a reading of consumer confidence came in at its highest level since October 2000. However, pending home sales fell, Dow Jones Newswires reported.

The rand had lost 2.54% to the dollar by the JSE’s close, trading at R14.7148 from R14.3497.

At the same time the Dow had relinquished 0.26%, following in the footsteps of European markets, where the FTSE 100 was down 0.63% and the DAX 30 0.47%.

The JSE all share closed 2.27% lower at 58,802.7 points and the top 40 2.55%. Industrials lost 3.82%, general retailers 2.99%, food and drug retailers 2.1%, banks 1.52%, property 1.42%, financials 1.26% and the gold index 0.66%.

Sasol added 0.15% to R562.65.

Santam shed 0.34% to R300. The group reported earlier that headline earnings per share (HEPS) increased 72% for the six months to end-June. The interim dividend was up 8%.

Advanced Health rose 2.17% to 47c. It said earlier revenue increased by 32% to R409m for the year to end-June.

Growthpoint dropped 3.95% to R24.78 but Nepi Rockcastle rose 1.11% to R137.07. Both released results on Wednesday.

Curro Holdings dropped 1.56% to R31.50, bringing losses for the year to 25.7%.