Massmart: Stock leads six-day retailers’ rise

Massmart, the supermarket chain owned by Wal-Mart Stores, led the JSE’s index of retailers as it posted the longest winning streak in nine months. The 11-member FTSE/JSE Africa general retailers index gained for a sixth day yesterday, the longest stretch since the seven days through December 7 last year. The gauge advanced as much as 2.6 percent to 63 704 points, a three-and-a-half-month high, by 3.30pm and closed 2.21 percent up at 63 441.67 points. The index has declined 9 percent this year, compared with the all share index’s 11 percent gain, as investors have sold stocks on concern that consumers are struggling to pay debt. African Bank Investments, the largest unsecured lender, said net income for the six months to March fell 26 percent as bad debts rose. “People are becoming less worried about the credit environment of the consumer,” Diane Laas of Investec Asset Management said. “Given the African Bank bad debt news, the market has been negative on the bad debt experience of credit retailers Truworths and The Foschini Group. People have been pricing a higher bad-debt scenario.” Massmart, the country’s largest wholesale distributor, has risen 9.7 percent since September 5, when the rally of the retailers gauge started, and advanced 4.05 percent to R173.25 yesterday, the highest in more than a month. – Bloomberg