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[August 08, 2014]
Abil drags down bourse further on finance deficit fears [Star, The (South Africa)]
(Star, The (South Africa) Via Acquire Media NewsEdge) The blue chip Top40 index slumped by 0.84 percent to 45 533.20 points, while the broader all share index lost 0.82 percent to 50 674.61.
Abil, as the bank is widely known, tumbled by 81.48 percent to an almost 20-year low of 50c, after falling more than 60 percent the previous day.
The bank, whose business model is based solely on unsecured lending, said on Wednesday that it needed to raise R8.5 billion in new capital, after warning of a massive annual loss, following which its chief executive quit.
"African Bank didn't see the curve of the turn of the economy, and they approached the curve at a ' kilometres an hour. They should have seen the warning signs; they got it wrong," Martin Lentsoane at Lehumo Capital said. "When the trading statement came out yesterday [on Wednesday], it was the last straw that broke the camel's back." Old Mutual declined by 1.62 percent to R34.55 after the financial group said the economic fallout from mining strikes across the country would weigh on full-year sales.
On the upside, shares of wireless carrier MTN Group rose 2.81 percent to R223.61, after the company reported a rise in first-half profit, as strong demand for its high-margin data services offset slow voice growth at home.
Trade was robust with about 367 million shares changing hands compared with last year's daily average of about ° million shares.
Decliners outpaced advancers 197 to 94, while 64 issues were unchanged, according to preliminary bourse data.
The Star (c) 2014 Independent Newspapers (Pty) Limited. All rights strictly reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
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