JSE stocks flat, Abil drops

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IOL image JSE interior view INDEPENDENT MEDIA The JSE is seen in this file photo: Leon Nicholas.

Johannesburg - South Africa stocks were flat for a second straight session on Friday, while African Bank Investment fell after a negative rating from rating agency Moody's.

Credit agency Moody's cut its international rating on African Bank Investments (Abil) to below investment grade, or “junk”, citing concerns about spiralling bad loans and sending its shares down nearly 7 percent.

Abil, which owns furniture retailer Ellerines, said it does not expect dramatically higher funding costs after the downgrade.

“The big noose around their neck is obviously Ellerines. We have seen what has happened to the other furniture guys,” said Ron Klipin, portfolio manager at Cratos Wealth.

Abil said earlier this month that Ellerines is expected to book a loss of up to 1.3 billion rand in the first half of this year as customers scaled back on purchases.

Abil's shares fell 6.77 percent to 8.40 rand to become the biggest decliner among 40 companies listed on the Johannesburg stock exchange's Top-40 index.

The benchmark Top-40 index was down 0.23 percent at 44,641.55 while the wider All-share index dipped 0.19 percent to 49,632.70.

Kumba Iron Ore fell 5.3 percent to 322.98 rand, its lowest level in more than three years while rival Assore fell 2.8 percent 340 rand.

Commodity prices including those of iron ore and gold fell on Friday as a result of soft demand in Asia and oversupply.

Three of the worlds top platinum producers have been badly affected by a South African mine strike in its 19th week that has cut almost half of global production and collectively lost them more than 20 billion rand.

The platinum mining index fell 0.9 percent on Friday while the gold index rose 0.9 percent.

AngloGold Ashanti rose 0.8 percent to 164.89 rand.

Trade was active with about 249 million shares changing hands, with advancers outpacing decliners, 166 to 147. - Reuters

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