Daily Report 05 October 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 3.3% higher to 66 313, on improving global sentiment and expectations that the US Federal Reserve might ease the pace of aggressive interest rate hikes. Anglo American PLC said that it will form a new joint company with Electricite de France SA subsidiary EDF Renewables, named Envusa Energy, to develop renewable energy in South Africa. The miner will partner with EDF Renewables to develop up to 5GW of renewable energy in SA by 2030. The first phase is expected to be fully funded, including by attracting debt financing, and will be ready for construction to begin in 2023. Envusa Energy said that the first tranche of 600MW of wind and solar power is set to come online in 2023. Oceana said that it has sold its cold storage business for R760m. According to Oceana’s 2022 interim results, the commercial cold storage and logistics business unit was the smallest business segment by revenue, generating 4.3% of the R3.18bn total revenue. In a trading update from Newpark Reit Limited, distributable earnings per share for the six months ended 31 August 2022 is expected to be 31,17 cents per share, being between 43,9% higher than the distributable earnings per share of 21,66 cents per share for the six months ended 31 August 2021. The company intends to declare a dividend for HY2022 of 25,00 cents per share, being an increase of 15,4% compared to the dividend of 21,66 cents per share for HY2021.

SA Economy:

The United National Transport Union (UNTU) served the state-owned ports and freight-rail company with a notice that its members plan to stop work from tomorrow, a move that may curb shipments of coal and other minerals. South Africa has until the end of October to prove to the global economy that it is secure and taking action to mitigate financial crime and is doing enough to avoid being greylisted by the Financial Action Task Force (FATF). Before this deadline, the government must provide a second follow-up report to the FATF, showing that it has done or is doing enough to address its points of concern, or face a possible grey listing in February 2023. In its biannual monetary policy review, the South African Reserve Bank said that further rate hikes would be needed to bring inflation back to the target of 3-6%.

​Global Economy:

The producer price inflation in the Euro area hit a new record high of 43.3% year-on-year in August 2022, up from a revised 38% in July and slightly above market expectations of 43.1%, because of soaring energy prices and supply bottlenecks. Investors will now focus on the latest US employment report due on Friday, where economists expect the nonfarm payrolls to have risen by 250 000 in September, less than the 315 000 previously reported, but still a healthy number overall. The unemployment rate is seen unchanged at 3.7%. Investors will receive more clues about the employment data later today, when the ADP jobs report is released. 

Global Company:

The FTSE 100 closed 2.57% higher at 7 086, led by financial shares and commodity shares. The Hang Seng Index is up 6% to 18 107, taking cues from a strong close on Wall Street. In China, the Shanghai Composite is closed for a public holiday. The Dow Jones Industrial Average rose by 2.8% to 30 316, while the S&P 500 climbed 3.06% to 3 790. Shares of Twitter gained 21% on reports that Elon Musk plans to go through with the company buyout deal at $54.20 per share. Apple Inc. asked its suppliers to move some AirPods and Beats headphone production to India.

Commodities:

Gold is up 0.96% to $1 720/oz, while Platinum is higher by 1.34% to $922.37/oz. Brent crude was 2.55% firmer at $91.69 a barrel.

Currencies:

The rand traded at R17.62 against the US Dollar, R20.22 against British Pound and R17.62 against the Euro. The Euro is firmer against the US Dollar to trade at $0.9968.