Business News 11 March 2020
An oil price war between Saudi Arabia and Russia added to growing panic about the spread of the COVID-19 coronavirus, sending global markets into a tailspin. According to Reuters, a 20% slump in oil prices was the biggest daily rout since the Gulf war in 1991, triggered after the two rivals said they would raise production as a three-year pact to limit supply fell apart.
The JSE shed 6.2% in its worst day since the global financial crisis, with no sector spared the carnage. Resource stocks declined by an average 12%, telecoms shares dropped 11% and the JSE’s banks index was down close to 5%. The rand weakened by more than 3% against the dollar, 4% to the pound and 5% to the euro as investors moved out of risky assets.
European markets toppled over 7%, as did the US, triggering automatic trading halts when Wall Street opened.
Sasol fell by 50% at its worst as news of the Saudi-Russia spat on oil output and general weakness in overseas markets spilled over into outright panic on what the implications of lower oil prices would mean for its finances.
While Assore’s shares declined in line with weaker resource stocks, it could be in for a strong rise. After the close of trade the mining holding company announced plans to buy out minority shareholders at a generous premium. Because the share is tightly held, it doesn’t attract enough large institutional investors and tends to be quite volatile. It believes the buyout will provide minorities with a valuable liquidity event.
Metrofile is another share with a buyout underpin. Its half-year results show a big improvement following a number of restructuring initiatives. It says the proposed takeover by a private investment consortium is making good progress.
AVI and Trellidor had difficult starts to their respective financial years as consumers tightened their belts. And Merafe didn’t try to gloss over its weak performance last year, describing its results as “underwhelming”.
Read more about these stories by following the links below.
Amid the market mayhem, Assore to delist | |
After 70 years on the JSE, the mining holding company says it is more suited to an unlisted environment. | |
Tough first half for AVI | |
The fast-moving consumer goods group has reported mixed fortunes as South Africans watch their spending. | |
Merafe underwhelmed with its results | |
The group reported a loss due to lower production, weaker prices and an impairment due to the discount its shares trade at relative to its NAV. | |
Metrofile increases dividend ahead of takeover | |
Shareholders will receive the interim dividend on top of the offer price made by the Housatronics Consortium. | |
Trellidor trims dividend as weak economy bites | |
The security gate and shutters group says the weak economy, house price deflation and poor confidence have weighed on sales. |
Pretoria Business |