Tech stocks tumble on broad sell-off

Tech stocks could not dodge a broad sell-off on the local exchange on Monday (15 April 2013), fuelled by weaker economic data out of China.

An analyst at PSG Konsult told BusinessTech that the sell-off was ignited by the economic news from the East, with resource stocks continuing to struggle, led by gold shares.

Resource stocks, globally, declined after China’s economic recovery slowed in the first three months of 2013 as the annual rate of growth eased back to 7.7% from 7.9% in the final quarter of 2012, official data showed on Monday (15 April).

The price of the gold dipped below $1,400, its lowest level since March 2011.

“The sell-off is broad-based. There are some defensive stocks which are slightly higher, like Richemont, and Naspers,” the analyst said.

Of telco stocks, he said: “It’s a case of selling now, asking later.”

The JSE All Share Index lost 1.41% to 38,085 points in afternoon trade, having hit an intraday worst level exceeding 2%. The index, however, has recently reached new highs in recent weeks, sustaining a level over the 40,000 mark. “We may well see a rebound towards the middle of the week,” the analyst said.

Leading tech’s fall, Telkom shed 4.39% or 63 cents to R13.72, while Vodacom lost 1.54% or R1.67 to R106.73.

MTN dropped R1.92 or 1.19% to R159.47. MTN has come off a 52 week range of R184.45, while Vodacom has come off a best of R129.88 over the past year.

Telkom warned on Monday (8 April) that headline earnings per share for the year ended March 2013 are expected to be at least 20% lower than the 324.7 cents recorded in the prior year.

ICT group Reunert fell 2.25% or R1.75 to R76.15, and Allied Technologies (Altech) was off by 0.8% to R36.13.

The Altech group advised on Friday (12 April) that its headline earnings and adjusted headline earnings per share for the year ended February 2013, are expected to be between 20% and 27% lower than previously.

The group said its basic earnings per share are expected to reflect a loss of between 950 cents and 970 cents, compared to a loss of 283 cents in 2012.

Media and internet giant, Naspers gained R3.48 to R568.08.

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Tech stocks tumble on broad sell-off