JOHANNESBURG, July 11 (Reuters) – South African stocks
slipped nearly 1 percent on Wednesday, as investors continued to
hit Exxaro Resources and other miners over worries that
slowing commodities demand would erase profits.
Shares of Mondi Ltd edged down 1 percent after the
paper maker said it would buy German packaging firm Nordenia
International from Oaktree Capital, a $782 million deal
that will give it a bigger presence in consumer packaging.
“The resources just seem to be getting hammered here, the
sector is not looking great,” said Richard Juchniewicz, a trader
at SBG Securities.
“This market is going to fall. Guys are saying things could
get pretty worse. Right at this time I’m not putting money on
the table.”
The benchmark Top-40 index closed down 0.93 percent
at 29,570.89.
The All-share index, the broadest measure of South
African stock performance, ended 0.81 percent lower at
33,724.69.
Exxaro’ extended its slide into a fourth straight session,
dropping 3.3 percent to 173.61 rand. The diversified miner has
fallen nearly 16 percent since Friday, when Kumba Iron Ore
– in which it owns 20 percent – warned of lower
first-half profits due to a drop in metal prices.
Exxaro was also been hurt by a sell-off this week in pigment
maker Tronox Inc. The New York-listed firm, which is
nearly 40 percent owned by Exxaro, has tumbled on concerns of
weakening demand.
Resource stocks have also been hurt by Chinese economic
data, which suggests the world’s second-largest economy is
facing its deepest slump since the 2008 crisis.
Continued…
