South Africa’s Sasol Is the worst emerging-market stock this week

It has been a week of steep drops for some emerging-market stocks, but Johannesburg-traded Sasol Ltd. has out-plunged its peers. Bloomberg

It has been a week of steep drops for some emerging-market stocks, but Johannesburg-traded Sasol Ltd. has out-plunged its peers. Bloomberg

Published Mar 11, 2020

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JOHANNESBURG - It has been a week of steep drops for some emerging-market stocks, but Johannesburg-traded Sasol Ltd. has out-plunged its peers, battered by the crash in oil prices and concern among investors of a potential looming rights offer as it grapples with a debt burden of about $8 billion.

Shares in the fuels and chemicals producer, South Africa’s biggest company by sales, have lost almost 58% since the week started, the most among the 1,401 members of the MSCI Emerging Markets Index, which is down 5.3%. 

The latest slump has dragged the stock to levels last seen in 2001.

Sasol delayed an investor call scheduled for Tuesday until March 17, noting that its oil-price exposure for the rest of the fiscal year is not hedged. 

It has been a week of steep drops for some emerging-market stocks, but Johannesburg-traded Sasol Ltd. has out-plunged its peersWhile the company had assumed oil will stay in a range of $50 to $70 a barrel, Brent crude traded just above $36 on Wednesday.

The stock was 7.1% lower as of 12:56 p.m. in Johannesburg, valuing the company at 41.7 billion rand ($2.6 billion). The yield on its $750 million of notes due in 2028 climbed for a sixth day to a record 6.88%.

Sasol’s 0.6% weighting in the benchmark Johannesburg index has limited its impact on the overall market this week. Among emerging markets, Poland’s WIG 20, Russia’s dollar-denominated RTS Index and Saudi Arabia’s Tadawul All Share Index have been the worst performers this week, falling at least 12%, while South Africa’s gauge has dropped about 4.7%.

BLOOMBERG 

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