South African stocks advanced to an all-time high as emerging markets benefit from low global interest rates, which are prompting investors to seek assets deemed as risky for higher returns.
The FTSE/JSE Africa All Share Index rallied for a fourth day to extend gains for the week to 2.3 percent, the most on a closing basis since the five days through Jan. 30. U.S. borrowing costs near zero prompted investors to put their money in developing nations, pushing the MSCI Emerging Markets Index up a 10th day in the longest winning streak since June 2010.
“Emerging markets are enjoying some serious inflows from developed markets,” Owen Nkomo, head of Inkunzi Investments, said by phone from Johannesburg. “The bottom line is this: emerging markets still offer very high yields on investments.”
An index of 10 retail companies jumped 2.1 percent to a record high on Friday. South African shopping chains struggled last year as unemployment of about 25 percent, prolonged strikes and high levels of personal debt contributed to a contraction in household incomes.
The all-share index climbed 0.8 percent to 53,420.78 by the close in Johannesburg, the highest on record. Of the 171 stocks on the gauge, 115 gained, 43 fell and 13 were unchanged. The price-to-earnings ratio on South African stocks was 20.7 on Friday, compared with 15.8 for the Dow Jones Industrial Average.
Pick n Pay Stores Ltd., a grocer, gained 3.1 percent to 52.38 rand after saying fiscal 2015 earnings per share rose as much as 50 percent. Clothes seller Truworths International Ltd. advanced 3.8 percent to 95.50 rand.
“Everywhere you look, the market has taken the stance that we have digested all the bad news,” Nkomo said. ‘We don’t expect any negative news out there to push the market lower anytime soon.’’