South African stocks rise again

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Independent Newspapers

The JSE board in Sandton, Johannesburg. Picture: Leon Nicholas

Johannesburg - South African stocks put in a sixth straight day of gains on Tuesday in a shortened Christmas Eve session as renewed appetite for risk brought the market closer to life highs reached last month.

Among gainers, Blue Label Telecoms, which provides pre-paid cellular airtime, added 2.3 percent to 8.10 rand after the company said one of its units had acquired a data provider for around $30 million that will open new channels for the distribution of its products and services.

Decliners included drugmaker Adcock Ingram, which shed almost 1 percent to 71.07 rand, after South Africa's state pension fund said it increased its stake in the company to over 22 percent, putting the fund closer to being able to single-handedly block a $1.2 billion Chilean takeover bid.

Johannesburg's Top-40 index added 0.42 percent to 40,163.56, 1,310 points short of its record peak hit on Nov 7.

The wider All-share index rose 0.36 percent to 44,912.80, 1,373 points shy of its life.

The late-year rally has mostly been fueled Wall Street's record run and the U.S. Federal Reserve's very modest steps to roll back its ultra-loose monetary policy which has helped to maintain the appeal of risky assets.

Analysts say a closer look at South Africa's fundamentals could bring the market back to earth as it is looking expensive when compared to its emerging market peers.

Growth is also sluggish in Africa's biggest economy which has been shaken by labour unrest.

“A new record may not happen this year though it's possible in the New Year. But a lot of players feel the market is expensive and people are not rushing into it,” said Abri du Plessis, chief investment officer at Gryphon Asset Management.

Advancers outnumbered decliners 133 to 100 with 49 issues unchanged. Volumes were light with around 95 million shares changing hands, according to preliminary bourse data.

The market will be closed Wednesday and Thursday for the Christmas Day and Day of Goodwill holidays. - Reuters

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