Aug. 20 (Bloomberg) -- Massmart Holdings Ltd. shares fell the most in more than eight years after the South African food and goods wholesaler owned by Wal-Mart Stores Inc. said first-half earnings declined as much as 29 percent.
The stock sank 8.6 percent, the steepest drop since June 2006, to 134 rand at the close in Johannesburg. About 1.64 million shares traded, or almost six times the three-month daily average.
Massmart earnings per share excluding one-time items were 1.59 rand to 1.78 rand in the 26 weeks to June 29, compared with 2.25 rand the previous year, the Johannesburg-based company said in a statement today. It didn’t give a reason for the decrease. The company will report results on Aug. 28.
South African retailers are struggling as high unemployment and inflation force shoppers to cut down on major purchases. Retail sales were unchanged in June, with inflation at 6.3 percent last month. The South African Reserve Bank raised its benchmark interest rate for the second time this year on July 17, cutting disposable income for borrowers.
Massmart’s statement comes a day after Shoprite Holdings Ltd. reported earnings that missed analyst expectations and said it’s shifting its investment focus to the rest of Africa as sales in its home market slow. Shoprite, South Africa’s biggest food retailer, dropped 2.4 percent today after a 5.6 percent slump yesterday to close at 142 rand, the lowest price since Feb. 28.
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