(Ecofin Agency) - The announcement of a 3.1% growth of South Africa’s retailing sector had a positive impact on the market capitalization of banks and retailing companies listed on the Johannesburg Stock Exchange.

Absa Group, FirstRand and Nedbank Group respectively gained 2.8%, 1.2% and 0.5%. SPAR group, Truworths International and Foschini (retailing groups) respectively gained 1.9%, 1.6% and 0.8%. 

This dynamic can be explained by the interaction between consumers and the financial sector in developed economies. A rise in the consumption presupposes more income for retailers and, it is also an indication that households have regained confidence, which is a positive sign for the consumer credit market.

The boom in the retailing sector has however not been observed in all sections, in the clothing section particularly. Woolworths and Mr Price, the two leaders in the clothing sector, announced a decrease in sales. Both respectively dropped by 8.25% and 12.4% at the opening of the Johannesburg Stock Exchange on January 17, 2019.