South African stocks fell for a third straight session on Friday, with iron ore producer Assore down sharply as the commodity's price was on track for its first weekly drop in a month due to Chinese steel mills keeping stockpiles low. Assore was the biggest decliner among bluechips, shedding 4.4 percent to 210.32 rand and taking its losses for the year to 38 percent amid concerns about cooling demand in China, the world's top consumer of the key steel-making ingredient.
Kumba Iron Ore lost 0.94 percent to 279.50 rand. Iron ore has recovered from a five-year low of $77.50 at the end of September, but has struggled to sustain gains in the face of a supply glut. More generally for South African equities, uncertainty is setting in after Finance Minister Nhlanhla Nene signalled in the Treasury's medium-term budget outlook that a tax shake-up was looming.
"We don't see changes to the tax system in South Africa very often and so this creates uncertainty," said Christie Viljoen of NKC Independent Economists. "It could be higher VAT which will hurt consumers, or it could be a higher corporate tax which will hit all of the listed companies as there will be less money for profits and dividends," he said. The benchmark Top-40 index shed 0.57 percent to 42,676.13 while the broader All-share index ended 0.47 percent lower at 47,879.45.
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