Daily Report 04 November 2022

SA Company News:
The Johannesburg Stock Exchange All-Share Index fell 1.6% to close at 66 047, as investors continued to digest the latest interest-rate hike and hawkish comments by the US Federal Reserve.
Grindrod Limited advised shareholders of the successful implementation of the disposal of 100% of the issued ordinary share capital of Grindrod Financial Holdings Limited (GFH) and 100% of the preference shares issued by Grindrod Bank Limited (Grindrod Bank) to African Bank Limited.
Truworths International announced that group retail sales for the first 17 weeks (from 4 July 2022 to 30 October 2022) of the 2023 financial period increased by 15.5% to R5.9 billion, compared to the first 17 weeks (from 28 June 2021 to 24 October 2021) of the 2022 financial period. Online sales continued to show good growth in the current period increasing by 33% and contributing 3.3% to Truworths Africa’s total retail sales. The Group’s interim results for the 26-week period ending 1 January 2023 are scheduled to be released on or about Thursday, 23 February 2023.
British prosecutors are seeking over $200 million in penalties from Glencore PLC to resolve a probe into bribery in Africa, and they said they now want to prosecute a number of the former executives.
In a quarterly trading update from MTN Group, the company said that group earnings before interest, tax, depreciation and amortisation (EBITDA) was up by 14.7%, group voice revenue grew by 2.7%, group data revenue up by 33.2% and group fintech revenue up by 12.9%. Subscriber growth in SA grew by over 800 000 to 35.9 million, an increase of 8.1%. MTN said they expect challenges from inflationary pressures and foreign currency volatility to remain in the final quarter of 2022.

SA Economy:
South African private sector activity contracted for the second straight month in October due to power cuts, port strikes and high inflation. S&P Global’s South Africa Purchasing Managers’ Index (PMI) crept up to 49.5 in October from 49.2 in September, staying just below the 50.0 line that divides expansions in activity from contractions.
The government remained firm on its view that the public wage increase that unions are demanding is simply unaffordable for the fiscus, which has led to four unions issuing certificates of non-resolution, effectively allowing workers to embark on a strike that could see nurses, police and other public sector workers stay away from work, disrupting key government services.

Global Economy:
The Bank of England increased interest rates by 75 bps to 3%, the biggest increase in 33 years as it tries to re-establish authority after weeks of political and financial market turmoil.
The unemployment rate in the Euro Area fell to a record low of 6.6% in September 2022, in line with market estimates.
US Jobless claims remain low. The number of Americans filing new claims for unemployment benefits fell by 1 000 to 217 000 on the week ending October 29th, below market forecasts of 220 000. The result reflected that labor market conditions remain tight.
Investors prepare for the important US jobs report due later today that could offer fresh clues on the pace of future rate hikes from the Federal Reserve.

Global Company:
European stocks closed lower after the Federal Reserve signaled plans to keep raising interest rates, possibly in smaller increments but to higher levels than previously anticipated.
The FTSE 100 closed 0.62% higher at 7 188, driven by gains in energy and healthcare stocks.
BMW reported a 23% increase in third-quarter profit due to robust demand for its pricier luxury models, but it warned that soaring inflation could limit purchases from consumers. The company reported net profit of nearly 3.2 billion euros ($3.1 billion), up from 2.6 billion euros between July and September last year.
The Hang Seng Index is higher by 5.86% to 16 223, as speculation mounted for authorities to end the strict Zero Covid policy. Tencent is up 9.30% at the time of writing.
In China, the Shanghai Composite is up 2.45% to 3 070.
The Dow Jones Industrial Average fell 0.46% to 32 001 while the S&P 500 was lower by 1.06% to 3 719.
Twitter said they will begin alerting employees by email about whether they will be laid off.

Commodities:
Gold is up 0.86% to $1 649/oz, while Platinum is lower by 0.3% to $928.75/oz.
Brent crude was 1.11% firmer at $96.60 a barrel.

Currencies:
The rand traded at R18.30 against the US Dollar, R20.56 against British Pound and R17.90 against the Euro.
The Euro is slightly weaker against the US Dollar to trade at $0.9778.