Barclays not convinced by gains in South African stocks: chart

January 12, 2016, 4:37am

By Neo Khanyile, Bloomberg Business
Chart: Bloomberg and Barclays on Bloomberg Business

Gains in the Top40 Index of South Africa’s biggest stocks probably won’t last and odds are skewed toward a selloff that may push the gauge down by almost 9 percent from current levels, according to Barclays Plc.

The measure has risen for two straight days to 43,618.18 by 4:06 p.m. in Johannesburg even as the rand fell to a record low and bonds tumbled.

While a close above the 43,700 level over the next two days may signal a relief rally that could push the index toward 45,000, risks are higher that there will be a selloff that could push it back to near 40,000, Judy Padayachee, a Johannesburg-based technical analyst for Barclays, said in an e-mailed note on Monday.