South Africa Stocks Fall Most in 8 Weeks on Syria ConcernsJaco Visser
South African stocks slumped the most in almost eight weeks amid a selloff in emerging-market assets as the U.S. and its allies moved closer to attacking Syria.
The 165-member benchmark FTSE/JSE Africa All-Share Index slid 1.8 percent, the most since July 5, by the close in Johannesburg. The MSCI Emerging Markets Index declined a second day, falling 0.4 percent.
“The global markets have in the last 72 hours started to digest the real possibility of a Western strike against Syria,” Ryan Wibberley, head of equity dealing for frontier and emerging markets at Investec Asset Management, which manages $105 billion, said by phone from Cape Town.
The U.S., France and the U.K. are considering military action against Syria after concluding the regime used chemical weapons against civilians. The tensions worsened a rout that’s seen global funds pulled out of emerging markets on bets the Federal Reserve will pare stimulus that drove demand for assets in those nations, including South Africa.
The spot price of gold rose 0.2 percent to $1,417.30 per ounce, close to its highest levels since May. South Africa is the world’s fifth-largest producer of the metal, where worker strikes over pay remain possible. The six-member FTSE/JSE Africa Gold Mining Index pared a monthly gain today with a 5.1 percent decline after a 4.1 percent rally yesterday.
“South African gold stocks had a good run yesterday,” Wibberley said. “There is a pull-back today but the gold index is still 10 percent higher this month. If the Syrian situation escalates we’re likely to see both gold and the gold miners find fresh form.”
Gold Fields Ltd. dropped 5.7 percent to 56.97 rand, while AngloGold Ashanti Ltd., the world’s third-biggest miner of the metal, declined 6.1 percent to 144.80 rand. There’s a 70 percent chance of strikes in the South African gold industry after the biggest unions rejected the last offer by producers, Mark Rosenberg, an Africa analyst at New York-based Eurasia Group, said in an e-mailed note today.