Shoprite drops over 4% on update

"General retailers had such a strong run last year that their valuations factored in only blue skies. Shoprite especially attracted a lot of foreign buying‚ riding the wave of its Africa expansion‚" said Gerhard Lampen‚ head of Sanlam iTrade. "The share price went from R131.50 in May to R206 by December‚ a 56% increase. This can be described as a healthy correction after some 'exuberance'."

Michele Santangelo‚ fund manager at Vunani Private Clients‚ said both domestic and foreign investors were second guessing the growth prospects of the sector after the Shoprite interim results had fallen below market expectations.

The company reported a 12.5% rise in headline earnings per share to 315.9c in the six months to December‚ from 280.8c a year ago.

At 1.25pm‚ Shoprite was down 3.41% to R171.91‚ with the drug and retailers index losing 2.76% and the general retailers index shedding 0.41% by the same time.