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The JSE ebbs lower in spite of a stellar performance by Steinhoff

by , 26 November 2014

Yesterday, stocks on South Africa's bourse closed in the red. The main contributor to the fall was a poor performance by mining stocks.

One stock that performed well was Steinhoff. It rallied strongly after announcing a deal to take over Pepkor.

Let's take a closer look at what went on…

Steinhoff closed 4.5% higher

The JSE ended in negative territory under the weight of some mining stocks, says BDLive. This is the second day in a row the local bourse has closed in the red. The market lacked direction in a day of “mixed global markets”.

Putting in a good performance was Steinhoff, which ended the day 4.5% higher at R58.49, reports Fin24. This followed news of a deal to take over Pepkor.

Shares in Brait took a hammering

The deal includes Brait Securities selling its Pepkor holding to Steinhoff, notes BDLive. Investors took this part of the deal badly, with shares in Brait closing the day “18.83% down at R71.79”.

Head of research at Imara SP Reid, Stephen Meintje, said that he’s confident in Brait over the long-term investment wise, adds BDLive. But he added that “for sceptical investors Brait is a sell now”.

Portfolio manager, Reuben Beelders of Gryphon Asset Management says Steinhoff already moves “low margin products in high volumes” with its furniture, says MoneyWeb. It now has access to do the same with “clothing, footwear and household goods” by taking over Pepkor.

At the end of the day, the Top 40 Index was down 0.38% at 44,909. The All Share Index was down 0.43% at 50,508.

Of the poorly performing shares, Omnia shed 11.23% taking it to R191.50, says Fin24. This came after the fertiliser company “posted a 5% decline in first-half profit”.

It was a busy day on the market with nearly 300 million shares traded, notes MoneyWeb. That’s “almost double last year’s daily average of 176 million shares”.

So a mixed bag of performances by stocks on the JSE. Time will tell if the JSE can break its days of losses.

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The JSE ebbs lower in spite of a stellar performance by Steinhoff
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