Truworths International Ltd. (TRU), South Africa’s largest listed clothing retailer, fell the most in three weeks on concern that lending growth is slowing and as monthly retail sales in the continent’s biggest economy shrank.
The stock slid as much as 3.2 percent, the most since Aug. 27 on an intraday basis, and traded 2.7 percent lower at 89.66 rand by 3:08 p.m. in Johannesburg. About 1.3 million shares traded, or 75 percent of the three-month daily average. The stock is the worst performer on the 11-member FTSE/JSE Africa General Retailers Index today, which fell 1.9 percent.
Retail sales contracted 0.5 percent in July on a monthly basis and rose 2.8 percent annually, missing the 3.9 percent median estimate of 14 economists surveyed by Bloomberg, according to Statistics South Africa. African Bank Investments Ltd. (ABL), the nation’s largest provider of loans not backed by assets, said earnings excluding one-time items probably dropped as much as 63 percent in the year through September as bad debts rise and the bank curbs lending growth.
“The sentiment toward unsecured lending is still not good,” Chris Gilmour, an analyst at Barclays Plc unit Absa Asset Management Private Clients, said by phone from Johannesburg. The sales figures show “a continued downward momentum,” he said.
Sales on credit at the Cape Town-based Truworths, which accounts for 72 percent of total retail sales, grew 9 percent in the 53 weeks through June 30, the company said Aug. 22. Unsecured lending levels are unlikely to improve in the current fiscal year, probably constraining credit sales, it said.
Truworths dropped 18 percent this year, the third-worst performer on the retailers’ gauge, which has retreated 9.8 percent. The FTSE/JSE Africa All-Share Index (JALSH) has rallied 11 percent in 2013.