Johannesburg - South African shares ended mixed on Wednesday after earlier reaching record highs despite an hour-long technical glitch at the start of trading on the Johannesburg Stock Exchange.
African Bank was the biggest gainer of the day as the company galloped to three-month highs, adding 11.31 percent at 12.20 rand.
“This was a stock that was down in the doldrums,” said Greg Davies, equity trader at Cratos Capital, suggesting that the share was seeing a short squeeze.
“We are perhaps seeing what is commonly known as a short squeeze. People who had sold the share at 11 rand thinking it was going to go lower are now having to buy the share back at around 12.15 rand and possibly higher,” he said.
Short-selling is a strategy where investors bet that a stock's price will fall.
An investor borrows a stock and sells it, aiming to buy it back at a lower price and pocket the difference as profit.
According to Reuters' data, the share's 14-day RSI, a momentum indicator watched by technical analysts, has risen into oversold territory above 70, and so it could be in for a correction.
After scaling a record peak earlier in the day, the benchmark Top-40 index shed 0.14 percent to 43,648.41 while the broader All-share index was little changed, edging up 0.01 percent at 48,647.62.
Advancers outpaced decliners 198 to 122, as 173 million shares changed hands, according to preliminary bourse data.
A database glitch had delayed the start of trading, the latest in a string of errors that have hampered Africa's biggest bourse in recent years.
Trade on the $900 billion exchange did not start until 10:00 SA time, rather than the usual opening time of 09:00 SA time.
The JSE said in a statement that the error was “related to a JSE database” and not the two-year-old Millennium Exchange trading platform that it had promised would put an end to its stability problems. - Reuters