JSE hit hard, rand weaker in volatile trade

DOMESTIC stocks pulled back from record highs yesterday with the main index marking its biggest one-day percentage drop in 14 months, weighed down by Naspers, PSG Group and Capitec Bank.

The rand reversed earlier gains in volatile trade.

Market heavyweight Naspers continued its slide after Morgan Stanley cut its target price to R4 900 from R5 400 on Monday. The e-commerce and pay-TV firm dropped 5.1 percent to R3 435.25.

That helped the all share index close down 2.07 percent to 59 546.23 points and the blue chip JSE Top40 index dropped 2.16 percent to close on 52 700 points.

The all share had its biggest daily percentage decline since December 2016, while the Top40 fell the most since November 2016.

“There’s a general sell-off in the market. Guys are just not interested in emerging markets as a whole,” said BP Bernstein equity trader, Vasili Girasis.

Capitec Bank earlier dropped as much as 25 percent after U. firm Viceroy Research said the lender overstated its financial assets and income, claims which the bank rejected.

The bank pared losses to close 2.96 percent lower at R915.92 after the company, central bank and its top shareholder PSG rejected the claims.

PSG was down 7.81 percent to end the session at R236.

“The market fears Viceroy because they came out with interesting information on Steinhoff. They are yet to be proven but certainly it helped push the share price down,” said Cratos Capital equities trader, Greg Davies.

On the foreign exchange market, the rand fell slightly in volatile trade, adding to losses from a day earlier that were driven by a stronger dollar.

However, at 5pm, the rand bid at R11.9629 to the dollar, 1.28c firmer than at the same time on Monday.

Investors were cautious as public utility Eskom, a company which international ratings agencies have called a threat to the country’s public finances, published delayed financial results.

Eskom on Tuesday flagged a 34 percent drop in profit in the first half of the financial year and described key ratios as “unsustainable”. But the new board said that it was confident it would escape a liquidity crunch.