SHARES of Mr Price, Woolworths, Shoprite and other blue-chip South African retailers fell on Tuesday, hit by concern that they are overbought after months of aggressive gains.
Sentiment may be souring after Shoprite, Africa’s top grocer, on Monday reported first-half sales that fell short of market expectations, sending its shares down nearly 6%.
"There’s a switch from the retailers into the mining stocks. There’s a recognition that these sectors (retailers) are way overbought in this market at the moment," Thebe Stockbroking’s Bruno van Eck said.
Retailers were leading the falls on the top 40 index on Tuesday. Mr Price was down 3.9% at R128.11 in intraday trade on Tuesday, while Woolworths had fallen 3% to R64.38. Shoprite was down 1.9% at R184.53.
Woolworths gained 80% in 2012 while Shoprite notched up 50%.
"They’ve seen some massive profits. It’s good to see something coming off the table. Markets have got to be flattened out, you can’t have one sector just flying, some kind of bubble will start to appear," Mr van Eck said.
Reuters
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