JOHANNESBURG - In a week where good news on the economic growth rate of South Africa should have been so positive for domestic and foreign investment in the country, the Steinhoff saga spoiled everything.

Not only did the share price tumble by around R49.80 from R55.80 a week ago to R6 at the close on Friday (a loss of 89percent), it contributed to a big sell-off of shares in general on the JSE. This on the back of the big sell-off in Naspers the previous week, caused share indices to tumble once again significantly last week.

Observers are now generally worried that high levels of corruption in government and state-owned enterprises, are now manifesting themselves in the private sector given the revelations around KPMG, Naspers and now Steinhoff.

The all share index lost 1437 points, or 2.4percent, last week. Industrials traded down by 2.5percent and resources ended the week 3.1percent lower due to a stronger rand and lower commodity prices.

Property shares also had decreased by 1.3percent.

News that the South African economy recorded a better than expected economic growth rate of 2percent during the third quarter, on the back of the revised 2.8percent growth rate in the second quarter, was encouraging. Although the growth came predominately from the massive 44.2percent growth in agriculture output, that contributed almost to half (0.9percent) of the increase in the gross domestic product number, growth in other sectors of the economy were also welcomed.

Mining and quarrying grew by 6.6percent and manufacturing by 4.3percent. These tendencies may have a far more than expected positive contribution to the growth rate during the fourth quarter and also the annual figures. It seems it’s now possible that the economy can grow by 1percent in 2017. This is much higher than the anticipated growth rate of 0.7percent.

Meanwhile, the rand continued to move stronger. The currency had improved to R13.60 to the dollar by 5pm on Friday. Against the pound, the rand had appreciated by 34cents (1.8percent) last week and traded at R18.23 on Friday. It was at R15.98 to the euro.