The JSE remained lower at midday on Wednesday, tracing the weaker tone in overseas markets while groceries retailer Shoprite soared on speculation that its investors might demand a higher price from its buyers.
Also, talk in the market that the MTN Group was a prime target for a private equity takeover sent the mobile telecommunications giant to a fresh trading high while most stocks plunged.
At 12pm, the all-share index was off 0,39% pulled down by a 1,02% plunge in resources. The gold- and platinum-mining indices fell 0,20% and 0,33% respectively. Industrials and banks both edged up 0,09% while financials were flat (+0,03%).
The rand was bid at 7,03 per dollar from 7,06 when the JSE closed on Tuesday, while gold was quoted at $690,15 a troy ounce from $687,65/oz at the JSE’s last close
“There are talks that Brait might increase its offer for Shoprite,” a Johannesburg-based dealer said.
This was after Business Report quoted Darren Cohn, top retail analyst from USB, as saying that Shoprite Holdings’ investors should demand at least R38 a share for the company. This is 36% more than an offer made by a group led by private equity group Brait.
Brait and a group including Shoprite chairperson Christo Wiese have made an offer of R28 a share, valuing the company at R14,2-billion.
Shares at Shoprite surged 5,25%, or R1,59, to a trading high of R31,89. It earlier touched a lifetime high of R32,23.
Also bucking the weaker tone on the local bourse was mobile telecommunications giant MTN Group, which gained 1,41%, or R14,7, to a new trading high R105,46. It earlier went as high as R107,95.
Dealers said there were rumours in the market that the company might be a target of a private equity takeover.
“The details are obviously sketchy, but the company’s share price is gaining despite stability concerns in risky Middle East,” the dealer said.
MTN has investments in war-ridded Middle East countries such as Iran and Afghanistan.
On the resources index, Anglo American fell 1,49%, or R5,86, to R386,17 and BHP Billiton was off 1,91%, or R3,20, to R164,75.
Gold counters joined the casualties with AngloGold Ashanti giving up R1,95 to R339 and Harmony 17 cents to R115,80.
Iron ore producer Kumba fell 24 cents to R147,75. It said earlier that the Senegalese government has been ordered to withdraw from the Faleme iron ore project after entering into agreements with a third party in relation to that project.
Petrochemicals group Sasol was off R1,50 to R244,75.
Platinum producer Anglo Platinum was down R11,10 to R1 218,90 but Impala Platinum added 30 cents to R247.
London-listed global brewer fell 25 cents to R162,78 while fine paper producer slumped 1,77%, or R2,27, to R125,73.
Earlier, international ratings agency Standard & Poor’s revised its outlook on South Africa-based forest products company Sappi to negative from stable, reflecting the company’s financial underperformance at the rating level, and the risk of a weaker, and less sustainable financial recovery than expected.
Financial services group PSG climbed 3,01%, or 83 cents, to R28,36 and Sanlam gained 2,07%, or 45 cents, to R22,20. — I-Net Bridge