South Africa's main stock index ended lower on Friday, extending losses to the second straight session with Steinhoff among the biggest decliners as it slugged it out with a French rival for Darty, Europe's third-largest retailer. The rand also stumbled as a rally of emerging market assets ran out of steam and investors booked profits on the currency ahead of the weekend.
Steinhoff, which is also listed in Frankfurt, dropped 2.96 percent to 86.51 rand. The company is out in front with a cash offer of $1.2 billion in a bidding war with Fnac for Darty. "Based on the smaller size and scale of Fnac, their inability to woo a sizeable amount of shareholders inside the business to be acquired, the market has decided Steinhoff are the number one bidder at this stage," said Vestact's portfolio manager Sasha Naryshkine. On the foreign exchange market, the rand weakened 0.6 percent to 14.3975 per dollar as of 1600 GMT, giving up gains that had seen it rally nearly 2.5 percent in the week as it outshone its developing market peers.
Traders said the rand's rally had run its course and would likely see some profit-taking as investors looked ahead to the United States Federal Reserve decision on interest rates next week. "No one is expecting a Fed rate hike just yet, but if the statement indicates a higher probability of a hike in June this could prompt a sell-off in EM assets," said Rajiev Rajkumar, emerging market analyst at 4Cast. "We could see the dollar-rand cross breaching the 15.00 level if the FOMC statement comes out on the hawkish side of market expectations." The Fed, which lifted its benchmark overnight interest rate in December for the first time in nearly a decade, meets on Wednesday, a day before Washington publishes its first estimate of first-quarter economic growth.
Government bonds were also weaker, with the benchmark 2026 paper adding 10.5 basis points to 9.065 percent.
On the bourse, Anglo American Platinum (Amplats) extended losses to the second straight session after the miner reported a halving in quarterly output. The bluechip JSE Top-40 index was down 0.7 percent at 46,505 and the broader All-share index fell by the same margin to 52,925. Trade was slow with just over 196 million shares changing hands, well below last year's daily average if 296 million shares.
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