JSE stocks rise, African Bank suspendedComment on this story
Johannesburg - South African stocks rose on Monday, tracking global markets after the central bank stepped in to bail out troubled African Bank Investments from a flood of bad debts.
South African stocks suffered last week as African Bank, or Abil as the bank is widely know, plunged after it warned of a full-year loss and said it would need a massive capital increase to shore up its balance sheet.
The news sparked a shareholder exodus that wiped more than $900 million (R9.6 billion) from Abil's market value in three days.
The central bank and commercial banks stepped in on Sunday with a $1.6 billion plan to rescue Abil.
Abil shares and debt were suspended immediately on the Johannesburg bourse, and the company is applying to have trade suspended on foreign exchanges.
The Top-40 blue-chip index was up 1.79 percent to 46,377 points while the broader all-share index rose 1.68 percent to 51,523.
The banking index was up 1.65 percent.
“We had been sold off unnecessarily last week. The decline was overdone. I'm not surprised at the market running so much - we are just making up lost ground,” said Owen Nkomo, executive partner at Inkunzi Investments.
Among the top gainers were mining firms such as base metal producer Assore, which rose 5 percent to 353.00 rand and diversified mining group African Rainbow Minerals, gaining 4 percent to 195.69 rand.
Trade was thin with about 140 million shares changing hands compared with last year's daily average of 175 million shares. Advancers outpaced decliners 218 to 88 while 51 issues were unchanged, according to preliminary bourse data. - Reuters