Adcock leads JSE higher
FMCG SUPPLIER NEWS
Fin24/ Reuters - Nov 18th, 09:26
Johannesburg - South African shares put in a second straight day of gains on Friday with drugs maker Adcock in focus after Chile's CFR Pharmaceuticals formally bid $1.2bn to acquire it.
Adcock ended 2.45% higher at R71.00 a share. In September the Chilean group's offer equated to R73.51 a share, based on the fixed value of R2.334 per new CFR share.
The fate of the deal, a rare Chile-South Africa tie up that could create an emerging market drugs giant, has been in doubt in recent days after Adcock's biggest shareholder, the Public Investment Corporation, rejected it.
But the Santiago-based company said on Friday it had support of shareholders holding 45% of Adcock and letters of support from a further 7.5%.
Overall, Johannesburg stocks gained in line with world shares, which climbed back towards five-year highs as markets cheered a robust defence of the Federal Reserve's money printing by Janet Yellen, who is expected to take charge of the US central bank next year.
But analysts have warned that based on valuations and domestic fundamentals, South African equities, which scaled life highs last week, should not be at current levels.
The economy is expected to grow barely two percent this year, sluggish by regional standards.
But rising inflation pressures due to rand weakness this year mean the central bank is not expected to offer support by reducing rates at its monetary policy committee meeting next week.
"The main story is Yellen's speech in the United States. It has very little to do with local fundamentals at the moment," said Abri du Plessis, chief investment officer at Gryphon Asset Management in Cape Town.
South Africa's Top-40 index rose 0.57% to 40 394.38. The wider All-share index index climbed 0.6% to 45 174.18. From Fin24.com
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