Share prices of listed South African (SA) firms reversed losses by gaining in market value as investors remained unresponsive to Xenophobic attacks on Nigerians and other African nationals in SA.
Companies like MTN South Africa, Shoprite and Pepkor holdings gained at the end of trading on Friday, returning gains lost by investors three days in the attacks.
“It is too early for investor to response to these attacks,” Gbolahan Ologunro, an analyst at CSL stockbrokers explained.
This was not the case however for Multichoice holding listed on the JSE, stock price picked up a little by 1.1 percent after a 4-trading day downward spree, closing at 12,408 ZAr on Friday.
The response of investors on Friday was different from observed reactions in the last four trading days.
Not only did “Xenophobia”- the fear or hatred of that which is perceived to be foreign or strange – claimed the lives of Nigerians and other neighbouring countries’ citizens in South Africa, the effect has also wiped off approximately $64.34 billion of listed South African market worth across African markets, BusinessDay analysis show.
MTN South Africa stock on the Johannesburg stock exchange was not spared as price slumped 2.26 percent, losing in market value 567.76 billion ZAr ($38.289 billion) after stock closed at 10,027 ZAr.
Amongst other listed South African peers observed in our analyses, MTN South Africa stood as the worst hit in dollar term.
Nigerians in response to attacks embarked on a retaliatory attack on South African companies. This saw MTN, DStv and Shoprite close tentatively operations across the country. However, the damage had been done.
Multichoice, parent company of DStv on the JSE bled some whooping $23.64 billion in market value after stock price slid to 6.37 percent to 12,463 ZAr to maintain a 3-day bearish trend upon Xenophobic attacks.
Shoprite holdings, despite maintained a stable price, shed marginally 0.53 percent during the period, losing approximately $2.43 billion as at the close of trading on Thursday.
Stock price of Nigeria’s biggest foreign direct investment (FDI) MTN, dipped 2.09 percent from a 3-month high of N141 at the last trading day of August to N138.05 at the end of trading on Thursday, upon inception of the Xenophobic attacks on Nigeria and other nationals in South Africa.
In the four trading days, MTN Nigeria lost N50.87 billion ($140.42 million) in market value as worth stood at N2.817 trillion.
“The trend we are seeing in MTN stocks is more of profit taking. If investors were to respond to Xenophobic attacks, great will be the fall in the Telco stock price,” analysts told BusinessDay.
Investors, who are more interested in the value of their holdings ignored the Telco’s public statement which stated their stance against ongoing attacks in South Africa. “We strongly condemn hate, prejudice, xenophobia and reiterate our unequivocal condemnation of all violence,” Ferdi Moolman, CEO MTN Nigeria stated.
Pepkor holdings on the JSE buoyed however a bullish run in price, gaining 5.70 percent in market value to 60.237 billion ZAr after price rose to 1,759 ZAr.
This is despite Nigerians ravaging Pep stores in Lagos in a bid to revenge the xenophobic attack going on in South Africa, taking-away clothes and items worth millions of naira.
Meanwhile, no attack so far on Stanbic IBTC despite being owned by Standard bank, a South African based financial service provider, listed on the JSE. “A lot of people are not aware that Stanbic IBTC is a South African owned bank,” an analyst told BusinessDay.
DAVID IBIDAPO
