Xenophobic Attacks: Johannesburg Stock Exchange, MTN, Others Lose Profits

Johannesburg Stock Exchange has felt the heat from the recent xenophobic attack against other nationals in South Africa. has reported that the growing violence meted out on African nationals living in South Africa is being felt on the Johannesburg stock exchange.

According to reports, Africa’s largest mobile phone operator, MTN Group Limited fell as much as 2%, after the company closed its offices in Nigeria following attacks on its premises in three cities.

In a related development, Shoprite Holdings Limited which is the continent’s largest food retailer dropped after its stores were attacked in Lagos. The benchmark South African index was 0.2% higher as of 2:27 p.m. after climbing as much as 0.7%. The MSCI Emerging Marketz Index rose 1.5%.

“It’s exactly the reason local retailers and stocks like MTN who have African exposure are losing ground today,” said Henre Herselman, a derivatives trader at Johannesburg-based Anchor Private Clients, which oversees 38 billion rand ($2.6 billion) for clients.

“I have seen several announcements from companies stating they have closed shops out of a fear a retaliation,” he said.

A worrisome spate of attacks broke out in Johannesburg on Sunday during which more than 50 shops and business premises mainly owned by other Africans were destroyed.

Cars and properties were set ablaze and hoodlums had a field day looting business premises in South Africa.

“From footage I’ve seen it most definitely will hit Shoprite hard because it goes beyond lost sales, but also cost of repairs and restoring the damage,” said Nolwandle Mthombeni, an analyst at Mergence Investment Managers in Cape Town.

“I don’t think this is a permanent deterrent from expanding into rest of continent, but it does mean any short term plans may be pushed.”

Also in Lagos, Nigeria’s commercial nerve centre yesterday, a young man was felled during the fracas between hoodlums and the police while a Shoprite outlet was attacked in Lekki area of the metropolis.

Meanwhile, Nigeria has also pulled out of the ongoing World Economic Forum in Cape Town, South Africa over the attacks on Nigerians and other Africans in South Africa.

The incident may further affect South African economic and diplomatic relationships are not well handled.

This is because Democratic Republic of Congo, Rwanda and Malawi had earlier announced their withdrawal from the summit.

The Nigerian government has also demanded full compensation for the victims of the attacks which would further tell on the South African economy.


Post Author: Dayo Emmanuel