The luxury goods company Compagnie Financière Richemont SA (JSE: CFR), better known as Richemont, has been attracting interest for all the right reasons.
The Switzerland-based luxury goods holding company announced that it would terminate its South African depository receipt programme and list its ‘A’ shares on the Johannesburg Stock Exchange (JSE) as a secondary listing. This new structure should improve the tradability of the “A” shares on the JSE and reduce the administrative complexity surrounding the depository receipts. If stakeholders approve the new structure, we could expect the listing to occur around 19 April 2023.
The share price has increased over 5% since the news broke of the secondary listing and could potentially be much higher if it remains above key support levels. To negate any downward pressure, the price action must stay above the critical base breakout around the R251.95 share level (red line). If this level does not hold, we could see the lower support at R240.00 as the first point of interest for the bears.
If the bulls step in at present levels supported by the fundamentals, we could expect the price action to push higher to the R293.52 resistance level, which would be the point of interest for the bulls.
If the positive sentiment continues, the bulls could see the price action move to R293.52, a share level if supported by the fundamentals. A potential short exists below the R251.95 base to the next support level, around R240.00 for the bear case.
Source: Compagnie Financière Richemont SA, JSE SENS, TradingView.
Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.