Monday May 18, 05:31 PM
S.African stocks rise as Vodacom makes solid debut
JOHANNESBURG, May 18 (Reuters) - South African stocks notched up a third day of gains on Monday, tracking a rise in global equities, with Vodacom making a solid debut in one of the country's biggest listings.
The rand regained some lost ground after the mobile operator's IPO went ahead, pulling back some of the 3 percent fall from Friday, when news broke trade unions planned to scupper it.
The JSE Top-40 index of blue-chip stocks ended 1.26 percent higher at 19,864.63 points, led by banking shares, while the broader All-share index rose 1.11 percent to 21,945.12 points.
Gains in global equities after above-forecast quarterly results from No.2 U.S. home improvement chain Lowe's Cos Inc added to a generally upbeat mood on the local bourse, traders said.
Vodacom closed at 58.80 rand, giving South Africa's leading cellular operator a market value of 87.4 billion rand ($10.12 billion), ahead of analysts' valuations of 70 to 85 billion rand.
'(Vodacom) has helped volumes quite a bit,' said Roy Lamb, a trader at Investec Securities. 'It has been steady at around 60 rand, the guys are finding their feet in terms of valuations.'
Telkom slid 47 percent to 60 rand after unbundling its 35 percent stake in Vodacom, which is part of the deal that gave Britain's Vodafone (LSE: VOD.L - news) control of Vodacom.
The rand was also lifted by a strong Wall Street and was trading at 8.61 to the greenback at 1555 GMT, 1.15 percent firmer than its previous close and well off the 3-week low of 8.78 touched overnight.
JOB LOSSES
Traders said with the listing now complete the rand would likely refocus on global developments and see-sawing risk appetite.
'The court case came and went and the Vodacom listing went ahead, so the rand retraced its losses,' Bidvest Bank chief dealer Ion de Vleeschauwer said.
The rand fell sharply after the regulator and labour federation COSATU, worried about job losses, tried block the deal.
A judge threw out the challenge on Sunday, easing concerns President Jacob Zuma's new government will buckle to pressure from his trade union allies.
The rand has rallied over the past two months, reaching a 7-month high of 8.2350 earlier in May, partly due to an inflow of funds to pay for the Vodafone transaction.
South African government bonds lost ground, with some investors scaling back expectations for more, aggressive interest rate cuts due to concerns about inflation.
De Vleeschauwer said higher oil prices and proposed big electricity tariff increases will keep inflation high, making the central bank wary of cutting rates too much, even though economic growth data next week is seen confirming the country's first recession in nearly two decades.
The yield, which moves inversely to the price, on the 2015 bond was up 9.5 basis points for the session at 8.37 percent, while the 2036 yield added 3.5 basis points at 8.33 percent.
The central bank has cut its repo rate by 350 basis points to 8.5 percent since December.
On the bourse, gold mining counters dipped, tracking the faltering price of the yellow metal.
AngloGold Ashanti slid 6.64 percent to 302.50 rand, Harmony was down 3.24 percent at 89.99 rand and Gold Fields fell 4.61 percent to 102.50 rand.
(Reporting by Gordon Bell and Tiisetso Motsoeneng) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/) ($1=8.635 Rand) Keywords: MARKETS SAFRICA/CLOSE
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
