Nigeria, Angola sales growth drives Shoprite stocks

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Stanley Opara with agency report

South Africa’s rand weakened on Tuesday, while stocks were little changed, with Shoprite topping the Blue-chip index after the retailer reported a rise in half-year profit.

Shoprite closed 3.52 per cent higher at 194.62 rand after the retailer reported a 15.5 per cent jump in half-year profit, buoyed by sales growth in Nigeria and Angola.

The rand traded at 13.1475 per dollar at 1502 GMT, down by 0.71 per cent from Monday’s New York close of 13.0550, while the yield on the benchmark government bond due in 2026 was down by one basis point at 8.790 per cent.

“The main driver today has been quite significant dollar strength and it appears that the fresh support for the dollar is stemming from hawkish speculation regarding Fed policy,” Reuters quoted ETM Analytics market analyst, Jana van Deventer, to have said.

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The dollar rose broadly on Tuesday after two Federal Reserve policymakers pointed to a potential United States interest rate rise next month, turning attention to the bullish fundamentals of the world’s biggest economy.

Investors were also cautious ahead of Finance Minister Pravin Gordhan’s annual budget speech on Wednesday, amid renewed fears of a cabinet reshuffle.

“Despite this latest sell-off, the rand is still relatively resilient,” Deventer added.

South African stocks were little changed, with retailer Shoprite and Steinhoff leading the gainers as investors continued to digest the collapse of their merger talks on Monday.

The All-Share Index inched up by 0.05 per cent to 52,586 points, while the Johannesburg’s benchmark Top-40 index gained 0.11 per cent to 45,556 points.

Steinhoff’s Johannesburg-listed shares rallied further after it called off talks with Shoprite, calming investor nervousness. Its shares strengthened by 2.70 per cent to 72 rand.

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“There was a lot of uncertainty involved in that deal on how they were going to gel the one with the other, I think after the talks fell through that uncertainty fell away and the investors like the fact that they get to have their independence again,” BP Bernstein trader, Vasili Tirasis, said.

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