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UPDATE 1-S.African main stock index chalks up record high, Group Five in demand
October 16, 2017 / 4:12 PM / 2 months ago

UPDATE 1-S.African main stock index chalks up record high, Group Five in demand

(Recasts with stocks, updates prices)

JOHANNESBURG, Oct 16 (Reuters) - South Africa’s main stock indexes reached record highs on Monday, tracking a rally in major overseas markets, with Group Five surging more than 20 percent after the builder received an offer for its European businesses.

The benchmark JSE Top-40 index added 0.51 percent to 51,713 after touching an all-time high of 51,915. The broader All-share index gained by the same margin to 58,163.

Group Five topped the gainers list on the bourse, rising as much as 43 percent before paring its advances to still a hefty 25 percent at 11.50 rand.

The company has received a 1.6 billion rand ($120.37 million) bid from Greenbay Properties for its best-performing road maintenance business in eastern Europe.

Garth Arena, an analyst at Avior Capital Markets, believes the amount offered “is fair and above the current fair value reflected by management in financial statements”.

In foreign exchange, the rand was stable, retreating only slightly from a three-week high touched on Friday.

At 1516 GMT, the rand traded at 13.29 per dollar, 0.19 percent weaker on the day.

Gerry van Rooyen, an economist at NKC African Economics, said he thought the impact of Friday’s court ruling upholding graft charges against President Jacob Zuma had been overstated.

He said that if inflation data due on Wednesday came in below expectations, then the rand could strengthen towards 13 to the dollar.

In fixed income, the yield for the benchmark government bond due in 2026 was up 0.5 basis points to 8.625 percent. ($1 = 13.2925 rand) (Reporting by Tiisetso Motsoeneng and Alex Winning; editing by Mark Heinrich)

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