Massmart leads retail rally
IOL Business/ Bloomberg News - Sep 16th 2013, 11:52
Johannesburg - Massmart Holdings Inc., the South African supermarket chain owned by Wal-Mart Stores Inc., is leading the country’s index of retailers as it heads for the longest winning streak in nine months.
The 11-member FTSE/JSE Africa General Retailers Index, which includes clothing sellers Truworths International Ltd. and the Foschini Group Ltd., gained for a sixth day, the longest stretch since the seven days through December 7.
The gauge advanced 2 percent to 63,275.91, the highest on a closing basis since May 30, by 1:19 p.m. in Johannesburg.
South African retailers lost 9.2 percent this year, compared with the all-share gauge’s 11 percent gain, as investors sold stocks on concern that consumers are struggling to pay debt.
African Bank Investments Ltd., the nation’s largest unsecured lender, said May 20 that net income for the six months through March dropped 26 percent as bad debts rose.
“People are becoming a little bit less worried about the credit environment of the South African consumer,” Diane Laas, an equity analyst at Cape Town-based Investec Asset Management, which manages the equivalent of $105 billion, said by phone.
“Given the African Bank bad debt news, the market has been negative on the bad debt experience of credit retailers Truworths and the Foschini Group. People have been pricing a higher bad-debt scenario.”
Massmart, the country’s largest wholesale distributor, rose 9.7 percent since September 5, when the retailers gauge’s rally started, and advanced 3.1 percent to 171.70 rand, the highest in more than a month.
Foschini, which owns the Fabiani and Charles & Keith brands in South Africa, surged 9.7 percent in the period and increased 1.6 percent to 108.59 rand, the highest since May 30.
The retailer index’s 14-day relative strength index rose to 70.3, a level that indicates to technical traders it may be overbought.
The gauge also pushed through the upper limit of its Bollinger band, a sign it may be due for a reversal.
Its stochastic oscillator is at 95, also implying an imminent turn.
South African consumers’ indebtedness, measured as a percentage of disposable income, rose 0.4 percentage point to 75.8 percent in the three months through June from the previous quarter, the Reserve Bank said in its quarterly bulletin released in Pretoria, the capital, yesterday.
The cost to service debt as a percentage of disposable income remained unchanged at 7.7 percent.
Woolworths Holdings Ltd., which sells international brands such as Country Road clothing and organic, free-range and specialty foods, reported a 27 percent increase in net income to 2.6 billion rand ($262 million) in the fiscal year through June.
Its stock climbed 1.2 percent to 74.56 rand today.
“The outcome of Woolworths’ year-end results and presentation is that there’s still some life left in the South African consumer environment,” Laas said. - Bloomberg News
© Independent On-line 2013. All rights reserved.
Massmart partners with Walmart’s global sourcing team to help local suppliers export to Walmart markets
10/09/2019 - 09:28
Representatives from Walmart’s Global Sourcing team are in Johannesburg to meet with 18 of Massmart’s South African suppliers who are interested in exploring opportunities to export their products to Walmart markets.
Makro and Game’s owner suffers big loss as shoppers opt for cut-price goods
29/08/2019 - 09:20
Walmart-controlled Massmart, owner of Makro, Game, Builders Warehouse and Dion Wired, has suffered a headline loss of R550 million for the six months to end-June – after earning a profit of more than R200 million in the same period last year.
Retail stocks: Look out for the potholes and opportunities
26/08/2019 - 16:22
Retailers and wholesalers on the JSE have been clobbered since their respective 2018 financial results.
Walmart Q2 revenue grows 1.8% year on year
20/08/2019 - 14:13
Total revenue of Walmart for its second quarter (Q2) of Financial Year 2020 (FY20) ending July 31 hit $130.4 billion, up 1.8 percent year on year, while the net sales of Walmart International decreased 1.1 percent year on year to $29.1 billion, the company reported.
Truworths reports steady performance
20/08/2019 - 10:04
Truworths International reported lower earnings for the year to June 2019 as Truworths posted a steady performance in the weak domestic retail market while the profitability of the Office chain was severely impacted by the depressed United Kingdom (UK) trading conditions.