JSE stocks fall for second session

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JSEPic INLSA The JSE board in Sandton in Johannesburg. Photo: Leon Nicholas.

Johannesburg - South African stocks edged down 0.6 percent on Monday, declining for the second straight session after nagging concerns about a slowdown in China's economy prompted investors to take profit in recent top performers such as Discovery Holdings.

Growth in China's services sector slowed sharply last month to its lowest point since August 2011, a private sector survey showed, adding to signs of slowing momentum in the world's second-largest economy.

In addition to a potential slowdown in China, a key market for South African resources, investors are also worried that local stock prices are overblown after a record run that has made Johannesburg one of world's most expensive emerging equity markets.

“Developed market equities are going to outperform South African equities, that's the way we view it. You could argue that developed market equities are still relatively cheap compared to South African equities,” said Mark Phillips, an analyst at Sanlam Investment's Multi Manager unit.

“There are pockets of value in the South African market, but a lot of the quality counters are quite expensive.”

The benchmark Top-40 index fell 0.61 percent to 41,164.45.

The broader All-Share index dropped 0.67 percent to 45,897.44.

Shares of Discovery Holdings, an insurer that has added more than a third over the last 12 months and is trading at nearly 22 times its earnings, fell 2.5 percent to 81.87 rand.

Drugmaker Aspen Pharmaceuticals, which is up over 55 percent over the last 12 months and trading at a hefty 35 times earnings, fell 2 percent to 268.01 rand.

Trade was relatively thin, with 113 million shares changing hands, according to preliminary bourse data. - Reuters



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