Daily Report 16 February 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.5% lower at the 79 742 level, dragged lower by a decline in resource shares as the prices of precious metals fell.

Glencore PLC reported full-year net profit of $17.32 billion compared with $4.97 billion a year earlier. Earnings before interest, taxes, depreciation and amortization of $34.06 billion for 2022, up from $21.32 billion in 2021 and slightly above a market consensus of $33.94 billion. The company said that they will return $7.1 billion to shareholders after reporting record 2022 earnings as a result of significant growth in its marketing and energy divisions.

Anglo American Platinum’s shares fell 5.3% after the company announced that Chief Executive Natascha Viljoen will step down next year to become operations chief at United States-based Newmont Corporation.

Telkom said that they will start the sale of a minority stake in its core fibre business by March, in order to unlock value and increase profit.

In a trading update from AngloGold Ashanti, the company said that it expects lower headline earnings for full-year 2022 despite higher gold production. AngloGold estimated headline earnings of $530 million to $560 million, or EPS of between $1.26 and $1.33, a decline of between 8% to 13%.

 

SA Economy:

The Consumer Price Index (CPI) declined by 0.1% to 6.9% in January. Food inflation hits a 14 year high, with price growth in bread & cereals +21.8%, oils & fats +18.5% and vegetables +14.3%. Analysts now expect inflation to drop quickly in the coming months and most likely to fall back within the Reserve Bank’s 3% to 6% target range by the middle of the year and toward the midpoint of the target by year-end.

Retail sales decreased by 0.6% from a year earlier in December 2022, following an upwardly revised 0.8% rise in the previous month and worse than market forecasts of a 0.1% fall.

The composite SACCI Business Confidence Index fell to 112.9 in January 2023 from an over seven-year high of 117.3 in the previous month.

 

Global Economy:

The annual inflation rate in the UK fell to 10.1% in January 2023. The headline reading is still in double-digits, but it reflects a significant drop from the 10.5% reading in December.

India’s trade deficit widened to $17.75 billion in January 2023, up from $17.42 in the same month last year.

Retail sales in the US came in higher than expected, jumping 3% month-over-month in January 2023, the biggest increase since March 2021 and above market forecasts of a 1.9% rise.

 

Global Company:

The FTSE 100 closed 0.55% higher at 7 997, led by gains in the consumer discretionary, industrial, and technology sectors.

Barclays shares fell 8.1% as the company cut its bonus pool for its bankers after reporting a 14% fall in full-year pre-tax profit on the back of credit impairment charges to prepare for possible bad loans.

The Hang Seng Index is higher by 2.15% to 21 260, with strong gains in healthcare, communications, tech and consumer related shares.

In China, the Shanghai Composite is up 0.76% to 3 305. High-growth technology shares led the advance.

The Dow Jones Industrial Average closed 0.11% higher to 34 128, while the S&P 500 was up 0.28% to 4 147.

Tesla was up 2.4% after Elon Musk said that he intends to appoint a new CEO to Twitter.

 

Commodities:

Gold is down 1.08% to $1 834.20/oz, while Platinum is lower by 2.35% to $911.70/oz.

Brent crude was 0.23% lower at $85.38 a barrel.

 

Currencies:

The rand traded at R18.03 against the US Dollar, R21.73 against British Pound and R19.30 against the Euro.

The Euro is flat against the US Dollar to trade at $1.0703.