The share price of South African-listed, Swiss-based luxury goods group Richemont (RCH) jumped 10% in morning trade on Monday, outperforming the 2% gains in the FTSE-JSE All-Share index due to what traders say is the improved outlook for a relatively short war in Iraq.
Richemont shares were last quoted at R11,35, more than R1 higher than the R10,31 level at which they closed on Friday. Trading volumes have been high, with more than 4,6 million shares valued at R50,8-million changing hands.
Richemont owns a portfolio of leading international brands including Cartier, Van Cleef & Arpels, Piaget, Montblanc, Dunhill and Lancel as well as the prestigious watch manufacturers Jaeger-LeCoultre, Baume & Mercier, IWC, Vacheron Constantin, A. Lange & Sohne, and Officine Panerai.
Dealers said Richemont was enjoying a bounce after having been sold down heavily in the past few weeks. Its shares have been trading at 3,5-year lows after having fallen about 60% in the past 12 months, beleaguered by a poor performance from depressed global consumer confidence in recent months, and also coming under pressure from the spread of Severe Acute Respiratory Syndrome (Sars) in Hong Kong and Singapore.
Better news coming from Iraq, which could indicate a relatively quick end to the fighting in the 19-day war, had lifted Richemont, traders said, because it stands to gain directly from an expected rise in travel at the end of the war. A substantial portion of its luxury goods sales come from airports around the world. – I-Net Bridge