Tech-heavy Naspers and Prosus led the JSE lower on Monday, while global markets were mixed as elevated Covid-19 cases and the rapid spread of the Delta variant in some countries threaten the pace of the economic recovery.
Shares in Steinhoff International, which lost about R200bn in market value due to one of SA’s worst accounting scandals, fell the most in about 15 months after a Western Cape High Court ruling that threatens its multibillion-rand settlement process.
On Friday, the court voided a key component of Steinhoff’s settlement plan, finding it had violated the Companies Act when restructuring debt in 2019 — something that had been critical for allowing the group to proceed with its plans for settling lawsuits.
The group, valued at R7.2bn on Monday, has unveiled a €1bn (about R17bn) plan to settle some of the dozens of lawsuits it faces in Germany, SA and the Netherlands.
Steinhoff has warned that its future is at risk if it fails to get a settlement over the line by the end of 2021. Its share price dropped 16.34% to R1.69.
Shares in Naspers and its global internet arm, Prosus, pulled the market lower on the day. Naspers fell the most in about 15 months, down 6.05% to R2,780. Prosus lost 5.96% to R1,311.32, its biggest drop since March 2021.
The threat of a third wave of infections in some countries and the rapid spread of the Delta variant continue to raise global concern, with SA hitting more than 26,400 new daily infections on Saturday.
Given the severe impact on the country’s health sector, this week’s statistics on daily infections may prompt the government to extend the adjusted level 4 regulations that expire on Sunday.
“Unfortunately, given the progression of the third wave since the measures were announced, we think it is likely that most, if not all, of the current restrictions will be extended,” the Bureau for Economic Research in Stellenbosch said.
“While it is too early to tell whether the restrictions helped in limiting the spread of Covid cases, the direct impact of the restrictions, the third wave and subsequent changes in consumer/firm behaviour on businesses is already apparent.”
The JSE all share lost 0.24% to 66,166 points and the top 40 0.35%. Industrials fell 1.99% and retailers 1.58%. Resources gained 1.66%, industrial metals 1.62% and precious metals 1.6%.
US markets were closed on Monday for the long Independence Day weekend.
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