South African stocks extend gains, Absa hammered

JOHANNESBURG (Reuters) - South African stocks closed higher for a second-straight session on Tuesday, buoyed by paper-maker Mondi Ltd, which hit a record high after it said first-half profit would be sharply higher.

Absa Group tumbled more than 7 percent, posting its biggest one-day drop in a year, after the bank's first-half earnings and dividend disappointed investors.

"The dividend is light," said Stephen Burrell, a trader at Johannesburg-based Avior Research. "Total dividend came in at about 10.58 but the market was looking at 11 rand so they are disappointing."

South Africa's benchmark Top-40 index rose 0.41 percent to 36,516.92, while the broader All-Share index was up 0.42 percent to 40,991.30.

Mondi surged 4.8 percent to 145.50 rand, the biggest gain on the blue-chip index and its highest close on record, according to Reuters data.

Mondi, which is also listed in London, said first-half profit would likely be "significantly higher", helped by one-time items.

Retailers also gained ground, as they rebounded after a recent sell-off.

"Retailers (are) finding some firm ground after their disappointing trading updates," said Avior Research's Burrell.

Shoprite, Africa's biggest retailer, rose 2.5 percent to 167.86 rand, while Truworths, South Africa's largest clothing seller by market value, gained 1.83 percent to 83.48 rand.

Woolworths, which sells clothing and groceries, climbed 1.4 percent to 66.64 rand.

Media and e-commerce group Naspers rose 3.8 percent to a record close of 830 rand, lifted by another surge in Chinese Internet firm Tencent, in which it owns a 34 percent stake.

More than 168 million shares changed hands, according to preliminary bourse data. Advancers edged out decliners, 151 to 150, with 55 stocks unchanged.

Source: http://news.yahoo.com/south-african-stocks-extend-gains-absa-hammered-161334480.html

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