Daily Report 12 March 2024

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.3% lower at the 73 482 level.

Kumba Iron Ore and Sasol were the biggest fallers, dropping 7.3% and 5.8%, respectively. Harmony Gold outperformed with an 8% gain.

In a trading update from Metair, the company said that it expects to return to profitability for the year to end-December. Metair expects to report headline earnings per share (HEPS) of between 128c and 140c from a loss of 17c a year ago, with double-digit revenue growth compared with the prior year and earnings before interest and taxation margin of about 3%. The company also said geopolitical tension and adverse economic policies in Turkey and Europe affected the international battery businesses with Turkish interest rates increasing to 42.5% and annual inflation peaking at 65%, contributed to a significant rise in interest costs for the group.

In a trading update from RFG Holdings, the company said that sales volumes declined by 5.2%, however, group revenue was up 5.1%, driven by price inflation of 7.9% as it recovered higher input costs.

Looking ahead, management said they expect sales volumes in the regional business to benefit from the Easter long weekend holiday period moving into March this year while the holiday fell in April in 2023, also demand from international customers remains good and export shipments are dependent on overcoming the port challenges.

Remgro said that it expects a huge dip in earnings for the six months ended 31 December 2023, after the company had to write-down of the value of its Heineken’s South African businesses, including Distell. Remgro’s headline earnings per share (HEPS) are expected to decrease by between 35% and 45% and are expected to be between 344 cents and 407 cents compared to the HEPS of 626 cents reported for the six months ended 31 December 2022. The company’s results are due to be released on the 19^th of March 2024.

 

SA Economy:

The FNB/BER Building Confidence Index fell by 16 points to reach a level of 27 in the first quarter of 2024, which was the joint lowest level since mid-2020. The current level means more than 70% of respondents to the index survey are dissatisfied with business conditions. According to Statistics South Africa, the real value of investment in buildings contracted by an annual rate of close to 6% in the fourth quarter 2023.

 

Global Economy:

The US Consumer Price Index (CPI) for February is due later today. The consensus is for headline CPI to remain flat at 3.1% YoY and Core CPI to drop from 3.9% in February to 3.7% YoY in March. These figures are expected to remain above the Fed’s inflation target which could suggest that interest-rate cuts are not imminent.

 

Global Company:

The FTSE 100 closed 0.12% higher at 7 669, as investors took a cautious stance ahead of key US inflation data due out later today.

The Hang Seng Index is trading 2.23% higher at 16 958, building on yesterday’s gains with property developers and technology stocks outperforming.

In China, the Shanghai Composite is down 0.27% to 3 060.

The Dow Jones Industrial Average closed 0.12% higher to 38 769, while the S&P 500 closed 0.11% lower at 5 117.

Nvidia declined for the second day in a row, falling 2%, after dropping more than 5% Friday. The stock is still up 77% for the year.

Oracle shares gained 13% after the company reported a 7% Y/Y growth in revenue to $13.3 billion, in line with analyst estimates, but management said that growth could be higher if it was not due to supply constraints.

 

Commodities:

The rally in the gold price seems to have taken a breather ahead of the US CPI release today. If the number comes in softer, then $2,200 may be on the cards for the yellow metal which is currently being supported by central bank buying and safe-haven demand.

Gold is trading flat at $2 178/oz, while Platinum is higher by 1.81% to $933.30/oz.

Brent crude was 1.08% higher at $82.20 a barrel.

 

Cryptocurrencies:

Bitcoin reached a new all-time high, getting close to $72 000, after the UK Financial Conduct Authority announced that it will allow recognized investment exchanges to launch exchange-traded notes backed by cryptocurrencies.

 

Currencies:

The rand traded at R18.68 against the US Dollar, R23.95 against British Pound and R20.43 against the Euro.

The Euro is slightly weaker against the US Dollar to trade at $1.0937.