Market Report: Old Mutual and Investec investors spooked after Zuma sacks South Africa’s finance minister

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There was a joint farewell On Thursday — the first to South African finance minister Nhlanhla Nene and the second to investors in Old Mutual and Investec who subsequently rushed for the exits.

President Jacob Zuma fired Nene, who was held in high regard in business circles, and installed the relatively unknown David van Rooyen in his place — a shock move which sent the rand crashing to new lows.

The decision to sack Nene now is perplexing for the mining industry, which accounts for a fifth of South Africa’s GDP.

The sector is already reeling from plummeting commodity prices and uncertainty surrounding the shaky South African economy.

It knocked FTSE 100 Anglo-African financial services giant Old Mutual 11.2p, or 6%, cheaper at 184.2p, and South African bank Investec, which was down 39.5p, or 7.5%, to 489p, dragging it to the bottom of the FTSE 250.

RBC heaped more pressure on Old Mutual by cutting its recommendation to underperform, which warned that “such significant exposure to the rand will hold back the share price”.

But Old Mutual’s slump was topped by that of Sports Direct which nosedived 75p, or 11%, to 591p, extending the Footsie’s losing streak to six straight days, off 12.78 points to 6113.90.

The new chairman of Ladbrokes, John Kelly, took a punt on his new berth by buying £35,000 of shares in the bookie, nudging them 0.5p higher to 117p.

A solid trading update from paving specialist Marshalls cemented a 5.1p gain at 332.6p.

Revenues for the first 11 months of the year rose 8% to £365 million even after a strong finish to 2014 and the company now expects full-year profits to be ahead of expectations.

Investors went off PZ Cussons, 5.5p worse off at 300.3p, as the Imperial Leather-maker painted a grim picture of the outlook in Nigeria, where it has a large market.

However, performance in the UK was strong in the first-half of the year after the launch of a new range of Carex bodywash products.


Smooth drive: London bus operator Go-Ahead is on track to hit targets (Picture: Glenn Copus)

Go-Ahead Group, which operates London’s buses, stuck by annual targets, helping shares up 37p to 2599p.

The firm expects first-half revenue growth in London of 2.5%, slower than the rail division but better than the regional bus business.

Imaginatik, the AIM-listed software minnow in which disgraced former Quindell boss Rob Terry has a 15.6% stake, edged down 0.33p to 5.3p as the company confirmed it will be “considering various funding options” — comments which will prick the ears of Terry, who has publicly stated his desire to take part in another funding round via his investment vehicle Quob Park Estate.

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December 10, 2015 |
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