South African Stocks Drop as Miners Lead Worst Week in 15 MonthsNeo Khanyile
South Africa’s main stocks gauge fell in the biggest weekly decline since June 2013 as foreigners sold shares and mining companies retreated on prospects for slower growth in China.
The FTSE/JSE All Share Index slipped 0.5 percent to 49,263.47 by 12:56 p.m. in Johannesburg, bringing its four-day drop to 4.2 percent. The market was closed for a public holiday on Sept. 24. The 14-day relative strength index was 26.7, below the oversold level of 30 for a second day.
“Some of the data coming out of China has been signaling a little bit of softness there,” Garth Mackenzie, founder of Traderscorner.co.za, said by phone today from Johannesburg. “U.S. markets have a come off the boil slightly as well. We’re just feeding from that and it’s having a little bit of a correction.”
South Africa, the world’s biggest platinum producer and sixth-largest gold miner, relies on metal exports for revenue. China became the biggest recipient of South African goods in 2010, according to data compiled by Bloomberg. The China Beige Book report on Sept. 23 showed the Asian nation’s economy remained stuck in “low gear” this quarter. The Dow Jones Industrial Average fell a third time in four days yesterday in New York.
Investors outside South Africa sold 3.2 billion rand ($286 million) of shares from the continent’s largest stock exchange in the week to yesterday, according to data from the bourse. Buyers abroad have offloaded the country’s equities for five straight days, the data show.
Assore Ltd., which mines iron ore and manganese, fell 15 percent in the week’s biggest decline. Kumba Iron Ore Ltd. lost 11 percent and Northam Platinum Ltd. dropped 10 percent. PPC Ltd. retreated 8.2 percent in the week after the chief executive officer quit on Sept. 22 over differences with the cement maker’s board.