South African stocks up as investors buy into retailers

An electronic board displaying movements in major indices is seen at Johannesburg stock exchange in Sandton September 23, 2008. REUTERS/Siphiwe Sibeko·Reuters· (Reuters)
Reuters
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JOHANNESBURG (Reuters) - South African stocks ended in the black on Tuesday led by retailers such as construction materials seller Cashbuild and upscale food and clothing retailer Woolworths. JD Group gained after the furniture retailer said it had agreed to sell its struggling financing arm. South African companies are cutting back the amount of credit they extend to low-income consumers as over indebtedness and unemployment squeeze customers' ability to repay loans. "It's another example of just how bad things are in the consumer credit sector," said Nic Norman-Smith, chief investment officer of Lentus Asset Management, regarding JD Group's proposed sale. JD Group shares were up 2 percent but those of its parent, Steinhoff International declined by nearly 4 percent. Cashbuild was the biggest advancer on the All-Share index after climbing nearly 6 percent to 137.50 rand. The company lifted its final dividend by a third to 253 cents per ordinary share after its earnings increased by 12 percent. Woolworths added 2 percent as it finalised a rights offer for $932 million to help repay financing for its acquisition of Australia's second-largest apparel retailer. Johannesburg's key indices, the Top-40 index and the All-share, were up 0.7 percent to 46,076 and 51,462 respectively. At least 164 million shares changed owners, according to preliminary bourse statistics, with advancers outpacing decliners 185 to 123.

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