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#RandReport: Naspers inquiry drags stocks lower, rand steady

South African listed shares fell on Tuesday after a US law firm launched an investigation into media and e-commerce giant Naspers.

Picture: Christa Eybers/EWN.

JOHANNESBURG - South African listed shares fell on Tuesday after a US law firm launched an investigation into media and e-commerce giant Naspers, while the rand and government bonds were little changed ahead of next week’s ruling party leadership vote.

The benchmark Top-40 index fell 1.25% to 52,413 points, while the All-Share index was 1.06% lower at 58,977 points.

Naspers came under pressure after weakness in Chinese internet company Tencent and extended losses to close down 3% at R3,520 after a US law firm launched an inquiry on behalf of shareholders into whether it engaged in securities fraud or other unlawful businesses practices.

Naspers, which holds a third of Hong Kong-listed Tencent, did not respond immediately to a request for comment.

There was also weakness in the bullion sector, with Gold Fields down 5.48% at R53.11 and Sibanye 6.42% lower at R16.75, pressured by a weaker rand and slipping spot gold prices.

Meanwhile, the rand traded at 13.5100 per dollar at 15.17 GMT, compared to a close of 13.5225 overnight in New York.

A currency trader said the rand was supported by better-than-expected third-quarter economic growth data, but he said importers buying foreign currency was a drag.

Investors in rand assets also have one eye on the race to succeed President Jacob Zuma as leader of the ruling African National Congress (ANC).

Signs that Deputy President Cyril Ramaphosa - who is viewed as the more business-friendly candidate for - has been doing well in nominations by ANC branches have supported the rand in recent weeks.

But it is far from certain that Ramaphosa will secure a victory.

“It is unlikely the market has fully priced in the different potential outcomes of December’s ANC elective conference,” analysts at Investec wrote in a note to clients. “There could be volatility in the rand should it disappoint”.

In fixed income, the yield on South Africa’s benchmark government bond due in 2026 was down 1 basis point, reflecting marginally stronger overall bond prices.

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