* Truworths 18-weeks sales up 16 percent
* Foschini’s H1 sales up 12.6 percent
* Shares in both companies up between 2-3 percent
(Adds Truworths, updates shares)
By Tiisetso Motsoeneng
JOHANNESBURG, Nov 8 (Reuters) – South African retailers
Foschini and Truworths reported a jump in
sales on Thursday, boosting their stock prices further as
investors bet consumers will carry on shopping thanks to wage
increases, cheap borrowing and government grants.
Share prices for retailers in Africa’s top economy have
surged over the past two years, with some more than doubling,
which is beginning to give some investors cause for concern.
“We don’t believe that you can carry on seeing this kind of
growth,” said Nic Norman-Smith, chief investment officer at
Lentus Asset Management in Johannesburg.
“You’ve got an increasingly indebted consumer base who are
feeling stronger because they’re earning more. They’re even more
bullish to take on more debt.”
Household debt in South Africa stands at 76 percent of
disposable income, according to government statistics, while the
unemployment rate is stuck at about 25 percent.
Continued…
