Shoprite Holdings Update

Shoprite has managed to achieve strong double digit sales growth in both its local and rest of African operations. The Non-RSA operations performance looks particularly good despite unfavourable currency translations.

Operational Update

Shoprite Holdings’ Q1 2017 operational update has showed the positive momentum to end FY16 to be continuing into the new financial year.

Group turnover has managed to grow by 15.7% against the prior year’s comparative quarter, with RSA sales increasing 12.4% and Non-RSA turnover achieving a staggering 35.1% turnover growth.

The Technical Picture

The share price has rebounded on the news to break the horizontal resistance line at 19700. The blue “W” on the chart highlights a double bottom reversal pattern. This pattern suggests the changing of the short term directional trend from down to up, hence the term reversal pattern. A move to test the closing high at 20855 is now favoured, while a close below the 19050 level considers the short term failure of the reversal pattern. 

Broker ratings

The current broker ratings as per Thompsons Reuters see a longer term consensus view of hold on Shoprite holdings.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.