Daily Report 13 October 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed flat at 64 530.
Zeder reported a decline of 13.5 cents in headline earnings per share for its interim results for the six months to end August, from a previous gain of 31.4 cents. Zeder’s profit before finance costs and taxation from continued operations decreased by 74.5% from R51 million in the previous corresponding period to R13 million. The company has declared a special dividend of 10 cents per share, subject to the required South African Reserve Bank approval being obtained. This was mainly as a result of the unbundling of its 42.2% shareholding in Kaap Agri Investment in April.
In an operational update from Steinhoff, the company said that its European cut-price retailer Pepco’s revenue increased by more than 17% to €4.8 billion, while Poundland only saw a 5% increase in sales. In its update, Steinhoff said that it has not taken any decision regarding a potential public listing of its US business, Mattress Firm. Steinhoff owns 50% of the company.
In a statement from African Bank, the company said that all the conditions and all the necessary regulatory approvals were obtained to acquire 100% of Grindrod Bank. The acquisition started in May 2022, and it was reported that the deal to acquire Grindrod Bank was valued at R1.5-billion.
In a trading update from Grindrod, the company said that the Maputo Port volumes were up 23%, Drybulk terminals volumes were up 47% and that repairs to the damaged berth infrastructure at the Matola terminal is now complete.
AngloGold Ashanti said that they are aiming for a 30% reduction in its Scope 1 and 2 greenhouse gas emissions by 2030, costing them about $1.1bn (R20bn), with the aim of achieving net zero emissions by 2050.

SA Economy:

The current strike action at Transnet is estimated to cost the economy more than R6 billion a day, with more than R1 billion worth of export goods such as coal, berries, and others, stuck at the ports, while at the same time risking inflating input prices. The unions are demanding above-inflation salary increases of between 12% and 13% while Transnet proposed wage increases of 4.25% for employees at G and H grades, 4.5% for H and I grade, and 5% for L grade.
The South African Chamber of Commerce and Industry (SACCI) monthly Business Confidence Index (BCI) increased to 110.9 in September from 105.6 in August, helped by an increase in tourism and greater trade volumes. Factors that were weighing on confidence in September included higher interest rates and lower share prices.

Global Economy:

The Producer Price Index (PPI) in the US went up 0.4% month-over-month in September 2022, while analysts expected a slight gain of 0.2%. PPI rose 8.5% in the 12 months through September, slightly higher than an estimated 8.4% rise. The reading, however, was lower than the 8.7% increase in August.
The minutes from last month’s Federal Reserve policy meeting showed that higher interest rates are to remain in place until prices come down. They said inflation was being driven mainly by supply chain problems and a shortage of labour.
The Consumer Price Index (CPI) in India rose 7.41% in September after a 7% increase in August, economists expected consumer prices to rise 7.3%. The IMF also lowered India’s GDP outlook for 2022 to 6.8% from 7.4%.
The Baltic Dry index, which measures the cost of shipping goods worldwide, fell for the fifth straight session, falling about 1.6% to a one-week low of 1 873 points.

Global Company:

The FTSE 100 closed 0.86% lower at 6 826.
JD Sports Fashion was down almost 10%, on news that its CFO will step down next year.
Homebuilder company, Barratt Developments shares drop 6.7% after the company warned that customers were losing interest in new-build properties due to high prices and rising borrowing costs.
Luxury goods company, LVMH gained 1.6% after it reported a 19% annual gain in third-quarter sales at 19.8 billion euros ($19.2 billion), mainly due to U.S. consumers taking advantage of the cheap Euro. Analysts had expected only 13% growth.
The Hang Seng Index fell 1.08% to 16 520.
In China, the Shanghai Composite is flat at 3 026, with investors also remaining cautious ahead of China’s CPI and trade figures for September due tomorrow.
The Dow Jones Industrial Average fell by 0.1% to 29 210, while the S&P 500 was lower by 0.33% to 3 577, as investors avoided riskier assets ahead of US inflation data that is expected later today that could influence the Federal Reserve’s monetary decision in November.
Shares of PepsiCo rose over 4% after the company said that third-quarter revenue grew 9% to $21.97 billion which was much higher than the $21 billion analyst expected.

Commodities:

Gold is down 0.14% to $1 668.70/oz, while Platinum is lower by 2.26% to $875.95/oz.
Brent crude was 2.12% lower at $92.32 a barrel.

Currencies:

The rand traded at R18.31 against the US Dollar, R20.30 against British Pound and R17.75 against the Euro.
The Euro is slightly weaker against the US Dollar to trade at $0.9698.