WHAT A SHARE PRICE RIDE
DIRECTORS AT YELLOW metal manufacturer and major exporter Bell Equipment must have, well, had upset stomachs to see their share price collapse by nearly 60% last week. It wasn’t a simple case of sell Bell – it was a massacre. However, by Friday 17 October Bell’s price had bounced back by around 277%. So what happened?
The company initially thought it was a mistrade on the JSE and complained to the securities authority, says Bell’s group strategy and public affairs director Guy Harris. But it turned out to be a legitimate trade, the result of a foreign investor liquidating a basket of South African stocks. Bell seems to have been among the last to go near the end of trade on Wednesday, 15 October at a ridiculous “best purchase bid” of 505c/share (compared to the close to 1800c the share had been trading at). Harris says bargain hunters stepped in and bought the share, bidding the price back to 1900c/share.
It’s understood relatively few Bell shares were sold, possibly only around 500. The foreign investor, whose name we don’t yet know, must have taken a huge loss but probably wasn’t too fussed, as Bell was probably a small part of a portfolio of SA stocks. What’s remarkable is that such a low bid was accepted, probably a sign of the currently skittish market.
Bell’s share price is down about 65% over the past year but is probably starting to look attractive again due to the sharply weakening rand. The company earns most of its revenue in foreign currencies, a large exporter of specialist construction and sugar and timber moving vehicles with a factory in Europe.
Recent interim results, with revenue up 35% and gross profit up 57%, were described by Bell as the best half-year results in the group’s history.