Daily Report 28 November 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed flat at the 73 151 level, with tech stocks leading the market lower, down around 0.5% whereas resource shares advanced slightly.

In a trading update from Standard Bank Group limited for the ten months to 31 October 2022, the company said that it saw double-digit net interest income growth over the past 10 months, and it expects stronger full-year total income growth and cost growth than previously guided. It said this mainly reflects faster than expected increases in interest rates and higher inflation, though it continues to expect income growth to outstrip expenses growth. Group earnings growth was boosted further by an ongoing recovery in Liberty earnings.

Woolworths will be the 18th company from the JSE’s top 40 to list on the A2X. The shares of the company will be available on the alternative exchange from December 2^nd. The secondary listing will not affect its primary listing on the JSE.

Quantum Foods Holdings limited released financial statements for the year ended 30 September 2022. The company said that operating profit fell 78% year on year to R32.5m and headline earnings 72.5% to R28.1m, despite the 11.5% increase in revenue to R6.02bn. Headline earnings per share decreased by 73% to 14.1 cents, from 52.2 cents and earnings per share decreased by 78% to 12.0 cents, from 53.9 cents. No final dividend has been declared by Quantum Foods.

 

SA Economy:

Stats SA will release the third quarter unemployment data tomorrow. SA’s jobs growth resisted expectations in the second quarter, pushing the unemployment rate a step closer to pre-pandemic levels as the easing of Covid-19 restrictions sparked a bout of hiring by employers looking to serve consumers who are eating out, shopping and travelling more.

The SA Reserve Bank will also release the private sector credit growth data for October.

The SA Revenue Service will release data on the country’s trade balance on Wednesday.

The three labour union federations Cosatu, Saftu and Fedusa are planning another strike day on Friday 2^nd of December, as the government refused to meet their wage increase demands.

Fitch Ratings agency has affirmed South Africa’s Long-Term Foreign Currency Issuer Default Rating (IDR) at ‘BB-‘ with a stable outlook.

 

Global Economy:

The German economy expanded 0.4% in the third quarter 2022, slightly better than a 0.3% rise in the first estimate and following a 0.1% growth in the second quarter.

The People’s Bank of China cut the reserve requirement ratio for financial institutions by 25bps on Friday, 25^th of November 2022, effective from December 5^th. The RRR for big banks now stands at 11%, the lowest since mid-2007.

The Baltic Dry Index, which measures the cost of shipping goods worldwide, gained for the third session on Friday, rising about 6.6% to a nearly two-week high of 1 324 points.

 

Global Company:

The FTSE 100 closed 0.27% higher at 7 486, helped by gains in energy shares.

The Hang Seng Index is lower by 2.33% to 17 162.

Meituan reported a profit in the third quarter, as the Chinese food-delivery company aggressively cut costs while facing pressure from China’s tight Covid curbs and weak consumer sentiment. The company posted a net profit of 1.22 billion yuan (US$170.6 million), compared with a loss of CNY9.99 billion in the same period last year. However, the company said that the ongoing pandemic continued to bring challenges to the hotel and travel business.

In China, the Shanghai Composite is down 1.44% to 3 057, as protests against China’s strict Covid restrictions spread across cities.

The Dow Jones Industrial Average rose by 0.45% to 34 347, while the S&P 500 closed flat at 4 026.

 

Commodities:

Gold is down 0.38% to $1 749/oz, while Platinum is lower by 1.13% to $977/oz.

Brent crude was 5.23% lower at $81.28 a barrel.

 

Currencies:

The rand traded at R17.15 against the US Dollar, R20.69 against British Pound and R17.77 against the Euro.

The Euro is slightly firmer weaker the US Dollar to trade at $1.0363.

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