Daily Report 10 November 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.9% higher at the 69 640 level.

Gold Fields outperformed, with its shares gaining 21% on the day as Yamana Gold confirmed that it will pay a $300 million break fee.

Northam Platinum announced that they have made a cash offer to buy the remaining shares of Royal Bafokeng Platinum (RBPlat) as it hopes to edge out Impala Platinum, who also has an eye on the platinum miner. The offer entails buying all or a portion of the remaining RBPlat shares at R172.70 per share, about a 15% premium to the Impala Platinum offer.

Vodacom said they have moved a step closer to a considerable expansion of its fibre footprint after the telecom’s regulator approved the transfer of Dark Fibre Africa’s licences to the mobile operator.

Sappi Limited reported its fourth quarter results for the period ended September 2022. The group delivered a new record quarterly EBITDA excluding special items of US$391 million, which was US$20 million above the previous record achieved in the prior quarter. Earnings per share excluding special items for the quarter was 44 US cents, up from 39 US cents in the prior quarter. Sappi declared a dividend of 15 US cents per share which will be paid to shareholders on the 16^th of January 2023.

In a trading update from AVI Limited, the company said that group revenue for the quarter ended September 2022 increased by 9.7%. Revenue growth was achieved in all major categories except I&J where poor catch rates and an unfavourable abalone sales mix impacted. Revenue and margin in the footwear and apparel business continue to improve.

 

SA Economy:

The government said while it notes the Public Servants’ Association’s plans to strike today, it expects no disruptions to service due to the industrial action. Public Service and Administration spokesperson Moses Mushi said that the strike would be limited to lunchtime pickets and workers are expected to be on duty during work hours. However, PSA assistant general manager Reuben Maleka said that public servants are prepared to go out on a full-blown shutdown regardless of the consequences.

 

Global Economy:

Investors gears up for US inflation data due later today which could influence the Federal Reserve’s next interest rate policy move. The annual inflation rate in the US is expected to ease slightly to 8% in October from 8.2%.

Early results from the US midterm elections point to a tighter-than-expected race between Democrats and Republicans, with the odds still favoring the Republicans to control the US House while the Senate remains up for grabs.

 

Global Company:

The FTSE 100 closed 0.14% lower at 7 296.

Asian stock markets fell this morning over growing concerns of an economic slowdown in China, while a crash in the crypto market also dampened sentiment.

The Hang Seng Index is lower by 2% to 16 030.

In China, the Shanghai Composite is down 0.68% to 3 027, as investors continue to monitor news about rising Covid-19 cases in China.

The Dow Jones Industrial Average was lower by 1.95% to 32 513, while the S&P 500 fell 2.08% to 3 748.

Meta Platforms Inc said that they will let go of 13% of its workforce, or more than 11 000 employees as the company battles with soaring costs and a weak advertising market. Meta will also extend its hiring freeze through to the first quarter of next year with only some exceptions being made. Meta shares rallied 5%.

Shares in Walt Disney Co fell 13% after the company missed analysts’ expectations for its fourth-quarter earnings and also reported $1.5 billion loss in its streaming division, Disney+.

 

Commodities:

Gold is flat at $1 709/oz, while Platinum is lower by 1.76% to $989.43/oz.

Brent crude was 3.52% lower at $92.25 a barrel.

 

Cryptocurrencies:

The Crypto selloff continues. Bitcoin traded below $16 000 overnight, the lowest in two years, as investors remained concerned about FTX insolvency proceedings. Binance said that they have abandoned its plans to acquire Sam Bankman-Fried’s FTX after a due diligence exam and recent reports of mishandled customer funds and alleged U.S. agency investigations of FTX.

 

Currencies:

The rand traded at R17.79 against the US Dollar, R20.30 against British Pound and R17.86 against the Euro.

The Euro is slightly weaker against the US Dollar to trade at $1.0033.