Amid the market mayhem, Assore to delist

An oil price war between Saudi Arabia and Russia added to growing panic about the spread of the COVID-19 coronavirus yesterday, sending global markets into a tailspin. According to Reuters, a 20% slump in oil prices was the biggest daily rout since the Gulf war in 1991, triggered after the two rivals said they would raise production as a three-year pact to limit supply fell apart.

The JSE shed 6.2% in its worst day since the global financial crisis, with no sector spared the carnage. Resource stocks declined by an average 12%, telecoms shares dropped 11% and the JSE's banks index was down close to 5%. The rand weakened by more than 3% against the dollar, 4% to the pound and 5% to the euro as investors moved out of risky assets.

European markets toppled over 7%, as did the US, triggering automatic trading halts when Wall Street opened.

Sasol fell by 50% at its worst as news of the Saudi-Russia spat on oil output and general weakness in overseas markets spilled over into outright panic on what the implications of lower oil prices would mean for its finances. Ingham Analytics keeps close tabs on the fortunes of Sasol and its latest note on Sasol - "What a gas" - is a must read for those investors looking on with despair at the carnage that is the Sasol share price. Follow this link to access the report.

While Assore's shares declined in line with weaker resource stocks, it could be in for a strong rise today. After the close of trade the mining holding company announced plans to buy out minority shareholders at a generous premium. Because the share is tightly held, it doesn't attract enough large institutional investors and tends to be quite volatile. It believes the buyout will provide minorities with a valuable liquidity event.

Metrofile is another share with a buyout underpin. Its half-year results show a big improvement following a number of restructuring initiatives. It says the proposed takeover by a private investment consortium is making good progress.

Also today, AVI and Trellidoor had difficult starts to their respective financial years as consumers tightened their belts. And Merafe didn't try to gloss over its weak performance last year, describing its results as "underwhelming".

Hold onto your hats - the volatility is like to continue for now!

Stephen Gunnion

Managing Editor, InceConnect

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