JOHANNESBURG (Reuters) - South African stocks closed at a new lifetime high on Wednesday, gaining more the 1 percent as positive earnings statements and upbeat economic data from China helped lift resources firms such as Assore.
Shares of Absa, the South African lender controlled by Barclays, ended up 0.3 percent at 149.20 having earlier declined on news its veteran deputy CEO would step down next year.
“There is a lot of positive trading statements being released in our market in the last few days,” said Betzi Yang, trader at Legae Securities.
“There is risk appetite. People are looking for a bit of a return. With a low interest environment, the only place where they can seek a bit of return is the equity market.”
The All-share index, closed at its highest level in its 17 year history, finishing up 1.03 percent at 334,139.52 and marking at least its seventh record close since the start of the year. The Top-40 added 1.1 percent to 30,518.66, its highest close since May 2008.
Banking group Absa, investment holding company Mvelaphanda, bathroomware retailer Italtile and information storage firm Metrofile were the latest companies to flag growth in profits.
Absa, which briefly lost ground in afternoon trade on news its deputy chief would be stepping down, said on Wednesday its full-year earnings likely rose by as much as 22 percent.
Base metal miner Assore topped the charts after jumping 7.5 percent to 245.19 rand, extending gains after announcing on Tuesday it expected to post half-year earnings nearly double those it reported a year ago.
Gold miners took a softer tone as risk appetite returned to markets. Second-placed producer Gold Fields lost 1.1 percent to 127.55 rand.
Technical analysis would caution that the valuations are overheating with South African stocks now trading at a price-to-earnings ratio of more than 13, putting them roughly on line with U.S. stocks, according to Thomson Reuters data.
“It is quite phenomenal, the run that we’ve had,” said Nic Norman-Smith of Lentus Asset Management. “All you can do is buy the cheap stuff, avoid the expensive stuff and the crash will probably come when one least expects it.”
Trade was relatively active, with 200 million shares changing hands on the boursee, according to preliminary exchange data and compared to last year’s daily average of 256 million shares.