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Retailers pull JSE off record high

Johannesburg – Trading was tentative on the JSE at noon after an initial positive open which nudged the bourse to a fresh intraday high.

The pronounced activity was mostly in the retail sector where stocks resumed their slide‚ with Truworths (TRU) and Mr Price (MPC) shedding more than 3% and 4% respectively in what some analysts attributed to the poorly received trading updated from Cashbuild (CSB)‚ which had tanked more than 8% by noon.

The JSE is seen in this file photo: Leon Nicholas. Credit: INDEPENDENT MEDIA

At 12.47am the JSE all share index was down 0.14% to 40‚594.11 points.

Key event risks later in the day include the first estimate of the fourth quarter US gross domestic product growth‚ and the conclusion of the two-day US Federal Reserve policy meeting.

Leading European shares were similarly tentative at noon‚ with UK’s FTSE 100 flat (0.03%).

Among individual shares on the JSE‚ MR Price (MPC) tumbled 4.80% to R117.92‚ Truworths (TRU) dropped 3.86% to R100.95‚ Shoprite (SHP) lost 2.93% to R171.83 and Cashbuild (CSB) was down 9.37% to R134.50.

“The (retail) sector still looks expensive. As far as I’m concerned there is still plenty of weakness ahead. Cashbuild trading update provides further proof that the sector is still overly priced‚” Reuben Beelders‚ portfolio manager at Gryphon Asset Management.

Cashbuild’s revenue in its second quarter to December 2012 was up 1% from a year earlier. In the past three years‚ revenue growth for the company has been above 8%.

Lonmin (LON) was down 3.12% to R45.29‚ but ArcelorMittal SA (ACL) gained 2.01% to R34.95‚ Kumba Iron Ore (KIO) lifted 2.39% to R594.91 and Telkom (TKG) was up 2.70% to R16.74. - I-Net Bridge

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