Indian shares reverse gains amid uncertainty about poll outcome

JOHANNESBURG: Tiger Brands Ltd earnings slumped as Africa’s biggest publicly traded packaged-food company suffered from weak consumer spending and the enforced shutdown of operations due to a deadly listeriosis outbreak.

Headline earnings per share declined 26% to 15.87 rand in the year through September, while revenue fell 9%.

Tiger Brands is seeking to emerge from the listeriosis crisis that overshadowed its business this year, forcing the company to temporarily close two factories and recall thousands of tonnes of processed meat. More than 200 people died.

However, that push has been held back by South Africa’s weak economy, where an increase in VAT and the rising cost of transportation have hurt shopping budgets.

A solution to the country’s chronic unemployment problem would be the biggest driver of a turnaround, chief executive officer Lawrence Mac Dougall told reporters.

Tiger Brands is developing a strategy for expanding in the rest of Africa. The company would start with Kenya, then move on to Nigeria, taking a “conservative approach” with local sales and management laying the ground- work for promoting products, the CEO said.

The shares have slumped 41% this year as the listeriosis crisis took its toll, and investors didn’t see much in yesterday’s earnings that signalled an upturn. The stock gained 0.3% to 271.60 rand as of 10:31 am in Johannesburg.

The company’s products include Tastic rice, Energade drinks and Doom insect repellent.

Tiger Brands also announced the unbundling of its 42% stake in Oceana Group Ltd, a South African fishing company, as it doesn’t fit with the core business.

The process would take about six months, Mac Dougall said. — Bloomberg MUMBAI: Indian equities reversed gains as investors continued to assess possible outcomes of elections in five states, seen as an indicator of voter mood toward the Narendra Modi-led Bharatiya Janata Party’s national government. The key stock indexes are headed for their first weekly decline in four.

The benchmark S&P BSE Sensex fell 0.2% to 35,127.42 as of 2pm in Mumbai yesterday, while the NSE Nifty 50 Index retreated 0.3%. The gauges wiped out gains of at least 0.4% earlier. Markets are closed for a holiday today.

Fourteen of the 19 sector indexes compiled by BSE Ltd dropped, led by the S&P BSE Metal Index’s 1.5% slide. A gauge of software exporters rose the most.

Automaker Mahindra & Mahindra Ltd’s 3.1% fall was the steepest among the Nifty members, extending its slide from a record high close on Aug 29 to 24%.

Votes for the phased polling that has begun in five states will be counted on Dec 11.

“Markets will remain volatile in the next six to nine months – either up or down – and investors will have to play the volatility to their advantage,” said Avinash Gorakshakar, head of research at Joindre Capital Services Ltd in Mumbai.”

“Oil price is a crucial factor for Indian equities and politics is a wild card and they would decide the direction of stocks near term,” he said. — Bloomberg