South African stocks slipped on Wednesday, driven by losses in Africa’s largest telecoms operator MTN after the devaluation of the Nigerian currency.
Nigeria is the biggest of MTN’s 22 operations across Africa and the Middle East and contributed more than a third of the company’s 72.8 billion rand ($6.6 billion) revenue in the first half of this year.
The Nigerian central bank devalued its currency by 8 percent on Tuesday as the oil-producing nation takes a hit from falling oil prices.
Shares of MTN dropped 1.4 percent to 221 rand.
“Any earnings that MTN will make in Nigeria will now be worth less, hence the movement. It should have a long-term effect on MTN shares,” said Kyle Dutton, a stockbroker at Mercato financial services.
Overall the stock market fell for the third straight day.
The benchmark Top-40 index fell 0.35 percent to 44,751. The broad All-Share dropped 0.30 percent to 50,355.
South African mining group Exxaro was the biggest loser, dropping 3 percent to 109 rand.
Shares in South African petrochemicals group Sasol were down almost 2 percent at 509 rand at the close of trade. Brent crude oil dropped towards $77 per barrel on Wednesday after Iran signalled OPEC was unlikely to push for a major change in oil output despite a collapse in prices.
Trade was active with 206 million shares trading hands, above last year’s daily average of 176 million shares.