Worst August since 1998 looms for South African stocks

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Worst August since 1998 looms for South African stocks | Fin24

Johannesburg’s benchmark index has fallen 4.5% since the month started, as of Wednesday’s close, the biggest August decline since 1998 and the steepest retreat for any month since October last year. Conflict over tariffs between the world’s two largest economies has spurred investors to flee riskier assets, including net sales of R23.4bn of South African stocks since August 1.

The picture could have been worse: the benchmark index has been propped up by gains in rand-hedge stocks benefiting from the currency’s 6.5% retreat against the dollar this month because of revenue earned abroad, and by the best month for gold shares since February 2016 as jittery investors take refuge in the traditional haven of bullion.

“The rand hedges have helped, because domestic counters are down even more than that, particularly retailers and banks,” Takaendesa said by phone. “Domestic South African stocks have been much weaker than is shown by the index.” General retailers have tumbled more than 8% this month as companies including Mr Price bemoaned the state of the South African economy and weakness among consumers. Bank stocks have lost 6%, pummelled by the slide in the currency.

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