SA stocks in fifth weekly gain; Telkom slips on CEO exit

South African stocks advanced for a fourth consecutive session, the longest winning streak since June 2, joining gains in global peers amid earnings optimism that helped Wall Street edge toward an all-time high despite mixed economic data. Telkom SA dragged on the market on news its chief executive officer will step down.

The FTSE/JSE Africa All Share Index was up 0.7% by 9:35 a.m. in Johannesburg, trading at its highest level in more than a week, as a broad rally led by miners and banks countered losses in index giant Naspers as well as telecommunications providers.

Friday’s gains set the index on track for a fifth consecutive weekly advance, the longest winning streak since May 2020. The index is 2% higher since Monday, its best weekly performance since May 7.

“Local equities in are positive territory, having taken their lead from stronger global markets, which have risen on the back of corporate earnings, among other factors,” said Lester Davids, a strategist at Unum Capital. “Stock leadership appears to be broad-based with Sasol, MTN and Anglo American among the biggest gainers so far in the session.”

The gains come after the South African Reserve Bank left interest rates unchanged at 3.5% and signaled a more dovish policy path.

“Our house view is dovish; SARB to begin hiking rates in mid-2022,” Matete Thulare, an analyst at Rand Merchant Bank, said in a client note.

Global stocks are on course for a modest weekly gain, bolstered by robust corporate profits and stimulus support. At the same time, July’s decline in 10-year US Treasury yields may signal concern over a possible peak in economic growth, in part as the delta coronavirus strain curbs mobility in some nations.

• Anglo American and BHP Group led the index for industrial miners up 1.1%, providing the biggest boost to the index.
  • Anglo American +1.5%, BHP +0.9%, Glencore +1%, African Rainbow Minerals +1%.
• Luxury goods retailer and popular rand hedge Richemont advanced 0.7% as the South African currency slides.
• Precious-metals miners rise for a fourth day, up 1% to a one-week high as gold and palladium prices advanced.
  • Impala Platinum Holdings +1.3%, Sibanye Stillwater +0.9%, AngloGold +0.8%, Gold Fields +0.7%, Northam Platinum. +1%, Harmony Gold Mining Co. +1%, Anglo American Platinum +0.3%, Royal Bafokeng Platinum +1%, Pan African Resources Plc +0.9%.
• Bank stocks extends gains for a fourth day, the longest winning streak since June 2. the sub-index is up 1% as market cheers decision to keep benchmark rate unchanged.
  • FirstRand +0.7%, Standard Bank Group +0.9%, Absa +1.5%, Capitec Bank +1.1%, Nedbank Group +1.4%, Investec Plc +1.7%.
• Naspers, with a 15% weighting on the index, falls for the first day in three, down 0.4% to provide the biggest drag to the index. Weakness comes as partly owned online gaming giant Tencent Holdings retreats in Hong Kong. Naspers holds a 29% stake in Tencent through its subsidiary Prosus NV, which retreated 0.3%.
• Telkom drops 3.1%, dragging the index for telecommunication providers lower, after CEO Sipho Maseko says he is stepping down after more than eight years at the helm of South Africa’s biggest fixed-line operator.
  • Blue Label Telecoms Ltd. -1.7%.
  • Peers MTN Group +1.8%, MultiChoice Group +0.7%, Vodacom Group +0.1%.
• Foreign investors remained net sellers of South African stocks for a fourth day Thursday, disposing of R962 million ($65 million) of equities, according to data from exchange operator JSE Ltd.