AB InBev YTD share price decline 27% on the JSE

Anheuser-Busch InBev (AB InBev), which listed on the Johannesburg Stock Exchange (JSE) in early January, has seen its share price fall by as much as 27%, according to a published report in the South African Business Day.

Removing the effects of currency fluctuations, the share price is down 15% in dollar terms.

The brewer’s listing on the JSE was meant to reassure South Africans and the country’s anti-trust regulators of its commitment to the nation and region in the wake of the merger with SABMiller.

In the brewer’s third quarter results and since the merger with SABMiller was finalized, AB InBev has seen volumes decline by 4.1% in Brazil, one of its biggest markets, which is going through a painful economic slowdown. The brewer has also seen flat performance in the U.S.

The weak third quarter results supports the conviction that AB InBev needed SABMiller’s emerging market business to offset declining volumes in matured markets.

Analysts are looking to the brewer to produce earnings growth from cost savings of the combined companies in the short to medium term, but in the longer term, there are growing concerns that even a recovery of the global economy might not be enough to return the industry to its 2013 peak. The industry has been in decline ever since.

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