Barloworld Corrects After One-Month Rally: Johannesburg Mover

Barloworld Ltd. (BAW), a seller of equipment to mining and construction companies, fell the most since Nov. 9 as a monthlong rally that followed a 53 percent rise in full-year income was snuffed out.

Shares in the Johannesburg-based company declined 3.4 percent at 82.79 rand. About 693,000 shares changed hands, or 88 percent of the three month daily average. The 29-member FTSE/JSE Africa Industrial Index was down about 0.7 percent.

“Barloworld was in an overbought space for a while,” Ferdi Heyneke, a trader at Afrifocus Securities (Pty) Ltd., said by phone today. “This paring wasn’t a surprise.” The stock’s relative strength index has been above 70, which to some technical analysts suggests a security is overbought and may be set for a reversal.

The stock reached 89.70 rand on Jan. 4, its highest level since May, following a 22 percent rally from Dec. 3. Barloworld reported record sales to mines amid a 53 percent rise in full- year net income to 1.6 billion rand ($180 million) in November. The FTSE/JSE Africa All Share Index hit the latest in a series of record highs on Jan. 9.

The equipment seller’s 30-day historical volatility, a measure of stock swings, increased to 30.35 from 27.91 yesterday. The FTSE/JSE Africa’s 30-day volatility measure was at 9.10 from 8.97 previously. A higher reading means an asset’s price can have bigger moves.

To contact the reporter on this story: Jaco Visser in Johannesburg at

To contact the editor responsible for this story: John Viljoen at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.