Daily Report 02 November 2022

SA Company News:
The Johannesburg Stock Exchange All-Share Index closed 1% higher at the 67 400 level, driven by sharp gains in the technology sector and on expectations that the US Federal Reserve will be announcing a slowdown in the pace of interest rate hikes starting in December or early next year.
Sasol said that they were launching a $750 million (R13.67 billion) five-year convertible bond that will be used to refinance debt, and for general corporate purposes. The bond will pay a coupon of between 4% and 4.5% and will be payable twice yearly, with the bonds maturing in 2027. A convertible bond refers to the ability to exchange the bond for shares, although this needs shareholder approval, with Sasol’s offer coming only a day after S&P Global Ratings agency raised its long-term credit rating to BB+.
Prosus NV and its parent Naspers rejected a report that they are in talks to sell their large stake in Chinese software and gaming giant, Tencent. Prosus holds a 28% stake in Tencent worth $70 billion at the current price. The company said it intends to sell the stake down gradually to fund a share repurchase program.
Sanlam and MTN’s partnership to market and distribute insurance and investment products across Africa has received the necessary regulatory approval.
Textainer Group Holdings Limited reported financial results for the third quarter ended 30 September 2022. The company said that net income was $76.4 million for the third quarter, as compared to $78.6 million for the second quarter of 2022 and headline earnings was $77.3 million for the third quarter, as compared to $78.8 million in the second quarter of 2022. Textainer declared a gross dividend of 25 US cents per ordinary share.
Dischem reported interim financial results for the six months ended 31 August 2022. The company said that revenue grew by 9.3% to R16.3 billion and headline earnings per share was up 44.3% to 70.3 cents per share over the prior comparable period. Dischem declared an interim cash dividend of 28.11861 cents per share.

SA Economy:
Moody’s Investors Service raised its outlook on Eskom’s debt ratings to positive for the first time since 2007, after South African Finance Minister, Enoch Godongwana said that the government could take over a substantial portion of the power company’s debt.
The Absa Purchasing Managers’ Index rose to 50 points in October of 2022 from 48.2 in September.
The October 2022 Household Affordability Index, which tracks food price data showed that the average cost of the household food basket decreased by R18.03 (-0.4%), from R4 805.86 in September 2022 to R4 787.83 in October 2022.
Public sector workers are preparing to down tools and strike nationally following a breakdown in wage negotiations with the government. Strike certificates have been issued to several unions representing health, education, police, and other public servants. If the strikes move ahead, they threaten to shut down vital public services and may also disrupt matric exams.

Global Economy:
The S&P Global India Manufacturing PMI increased to 55.3 in October 2022 from 55.1 in September, exceeding expectations for a slowdown to 54.9 and remaining above its long-run average of 53.7.
Retail sales in Hong Kong fell by 1.5% year-on-year in September 2022, following a marginally revised 3% decline in the previous month.
The S&P Global US Manufacturing PMI was revised higher to 50.2 in October of 2022 from a preliminary of 50.
The US Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, that job openings, a measure of labor demand, increased 437 000 to 10.7 million.

Since Russia pulled out of a deal to safeguard Ukrainian grain shipments, Turkey and the United Nations have worked closely with Ukraine to keep a so-called grain corridor running smoothly.

Global Company:
The FTSE 100 closed 1.29% higher at 7 186, with mining stocks, basic materials, financials, and consumer cyclicals among the top performers.
The Hang Seng Index is higher by 2.41% to 15 827.
In China, the Shanghai Composite is up 1.29% to 3 007, amid speculation that Chinese authorities are preparing to gradually exit strict Covid controls.
The Dow Jones Industrial Average fell 0.24% to 32 653, while the S&P 500 was lower by 0.41% to 3 856.
Johnson & Johnson (J&J) said that they are buying the heart pump maker, Abiomed for $16.6bn in cash in order to boost growth at its medical device’s unit.
Uber gained more than 12% after beating revenue estimates while offering strong guidance.

Commodities:
Gold is up 0.46% to $1 650/oz, while Platinum is higher by 1.83% to $958.75/oz.
Brent crude was 2.85% firmer at $95.58 a barrel.

Currencies:
The rand traded at R18.16 against the US Dollar, R20.88 against British Pound and R17.94 against the Euro.
The Euro is slightly weaker against the US Dollar to trade at $0.9882.