It has been reported that JSE (Johannesburg Stock Exchange) listed banks have lost R86 billion of their market capitalisation due to Pravin Gordhan’s dismissal as South Africa’s Minister of Finance.
According to a Sowetan Live report, the worst hit of the JSE banks is the FirstRand. The share price of the bank reportedly crashed by 12% from Thursday’s R49.12 to R43.25.
The nosediving in FirstRand share price tantamounted to a R33 billion fall in its market cap.
After FirstRand is the Standard Bank which experienced a 9.2% decline; falling from R153.70 to R139.50. The fall represents a R23 billion shedding of its market cap.
Also, the market cap of Rand Marchant Holdings reduced by R6.9 billion after its share price sank by 7.9% to R56.69. It’s the same story for Barclays Group Africa which experienced a 7.6% dwindling from R150.27 to R138.80. That, amounted to a R9.7 billion slashing of its market cap.
That’s not all. Nedbank didn’t escape the evil wind. The bank share price received a 6.8% cut from R260.65 to R242.80. Nedbank was left with no option but to embrace a R8.9 billion decline in its market cap.
Likewise, Capitec welcomed a R5 billion reduction in market cap. Thanks to the 5.4% fall it experienced from R798 to R755.01. On a general note, Johannesburg Stock Exchange’s banking index bagged a 7.7% lose which represents a fall by 585 points from Thursday’s 7,602 t0 7,017.
Earlier today, BuzzSouthAfrica reported that the rand reacted to Gordhan’s axing and slumped. The value of the rand plunged by more than 5% overnight.
Meanwhile, the CEO Initiative which was formed to strengthen South Africa’s economy and avert credit ratings downgrade after President Zuma axed former Finance Minister, Nhlanhla Nene has condemn the axing of Pravin Gordhan as Finance Minister.
CEO Initiative said they are “gravely concerned and disappointed by the ill-timed and irrational dismissal of a trusted and well-respected Minister of Finance and Deputy Finance Minister…
“This decision, and the manner in which it was taken, is likely to cause severe damage to an economy that is in dire need of growth and jobs.
“The rationale for the removal of other ministers in key departments at a time when the country is beginning to make progress on a number of fronts is also questionable.”
CEO Initiative upheld that the dismissal of Pravin Gordhan and his deputy has created a high risk of derailing any progress that has been achieved. It will “deal a serious blow to the economy,” they asserted.