SA stocks edge higher as government seeks to end riots

South African stocks edged higher after President Cyril Ramaphosa pleaded for calm following days of protests that are among the worst the nation has seen since the end of white-minority rule in 1994.

The FTSE/JSE Africa All Share Index was up 0.2% by 9:56 a.m. in Johannesburg, with strength in market heavyweights Naspers and Richemont countering weakness among banks as the local currency fell for a second day.

The unrest was initially triggered by last week’s incarceration of former President Jacob Zuma, and has since forced businesses to shut amid widespread looting, with major road transportation links disrupted. The government has deployed soldiers to stem violence that has killed 26 people in KwaZulu-Natal province, with deaths also reported in the economic hub of Gauteng, home to Johannesburg and the capital, Pretoria.

“The market was largely unmoved by this news, however, growing unrest across KZN and Johannesburg poses some risk to this if not contained by the police and government officials,” Refilwe Rakale, a research analyst at FutureGrowth, said in an emailed note.

Peers in Asia advanced Tuesday after their US counterparts notched further all-time highs as investors awaited the second-quarter earnings season. Expectations for solid results are underpinning the stock rally, as investors ponder how central banks will unwind their support driving the recovery from the pandemic.

Naspers, with a 14% weighting in the main Johannesburg index, jumped 1.7% to provide the biggest boost to the overall market, after Chinese government approval of a deal for partly owned Tencent Holdings Ltd. eased concerns about stricter regulation.

• Naspers holds a 29% stake in Tencent through its subsidiary Prosus NV. Tencent soared 3.9%, the biggest jump since May 25, while Prosus was up 1.8%.

Richemont gained 0.6%, with the luxury retailer buoyed by positive read-across from Swatch Group AG’s update.

Mining giants BHP Group Plc and Anglo American Plc led gains in an index of industrial miners, which gained 0.5%.

• BHP +0.6%, Anglo American +0.3%, Kumba Iron Ore +1.2%, Glencore +0.3%, African Rainbow Minerals +0.1%

Bank stocks dropped for a second consecutive session, falling as much as 1.7% as the rand slides against the dollar.

• FirstRand -2.1%, Standard Bank Group -1.3%, Capitec Bank Holdings -1.4%, Absa Group -1.1%, Nedbank Group -1%, Investec -0.2%.

Precious metals miners slid 0.9% as weakness in gold producers countered gains in platinum miners.

• AngloGold Ashanti -2.2%, Gold Fields -2.3%, Sibanye Stillwater -0.7%, Harmony Gold -2.4%, DRDGold -1.2%.

Food and drug retailers dropped 1.6%, while general retailers fell 1.1%.

• Shoprite Holdings -2.1%, Clicks Group -1.8%, Bid Corp -0.8%, Spar Group -1.8%, Pick n Pay Stores -0.9%, Dis-Chem Pharmacies -1%.
• Mr Price Group -1.7%, Foschini Group -1.2%, Woolworths Holdings -0.9%, Truworths International -0.8%, Massmart Holdings -2.1%, Pepkor Holdings -0.4%.

Foreigners remained net sellers of South African equities for a third day Monday, disposing of R2.85 billion ($198 million) worth of shares, according to exchange operator JSE Ltd. This was the largest outflow since June 18.