Daily Report 17 February 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 1% higher at the 80 220 level.

Bloomberg News reported that Vodafone Group is considering a range of strategic options for its $14 billion African unit Vodacom Group, following pressure from shareholders to improve performance. Options mentioned included a potential merger with other operators, a stake sale or a divestment of certain parts of the business. This information was believed to be from reliable sources but could be a rumor and speculation. Accuracy is not guaranteed. Shares in Vodacom closed 4% higher at R130.02 per share.

In a trading update from Zeda, which unbundled out of Barloworld, said that revenue climbed 24% to R2 billion and Earnings Before Interest, Taxation, Depreciation and Amortization (EBITDA) rose 23% to R783 million. Zeda said that they expect to sustain group performance into first half of financial year ending 30 September 2023 as market continues to recover.

In a trading update from African Rainbow Minerals, the company said that they expect headline earnings for the first half of 2023 to jump between 34% and 44%, in the range of R4.95 billion to R5.32 billion or R25.29 to R27.17 on a per-share basis. African Rainbow Minerals will publish its results for first half on the 6^th of March.

 

SA Economy:

The Fitch Ratings has warned that SA’s electricity crisis could weigh on the country’s ratings if it is not properly addressed and that the declaration of a national state of disaster highlights credit risks facing SA.

Moody’s also said that it expects the effect of blackouts on businesses, consumer sentiment and investment will weaken economic growth prospects and also threaten social and political stability.

In a parliamentary debate, President Cyril Ramaphosa defended his decision to appoint a new Minister of Electricity, by saying that with the new minister focused on load shedding, the country is in a better position to overcome the energy crisis.

 

Global Economy:

Hong Kong’s unemployment rate edged lower to 3.4% for the three months ended January 2023.

US producer prices increased 0.7% month-on-month in January and higher than market forecasts of 0.4%. Two Fed officials, Fed President Loretta Mester and James Bullard warned that they were considering 50bps rate hikes at the Fed’s March meeting.

 

Global Company:

The FTSE 100 closed 0.18% higher at 8 012, at a new record closing high

Standard Chartered was among the top gainers, up over 2%, after announcing a new $1 billion share buyback program.

The Hang Seng Index is lower by 0.76% to 20 825, driven lower by losses in tech and property shares. The notable decliners were Lenovo Group down 2.6%, Meituan lower by 2.2% and Baidu Inc. falling 1.8%.

In China, the Shanghai Composite is down 0.3% to 3 239.

The Dow Jones Industrial Average closed 1.28% lower to 33 696, while the S&P 500 was down 1.4% to 4 090.

Shopify shares fell 15.9% after the cloud-based commerce platform reported first-quarter revenue that missed expectations.

 

Commodities:

Gold is up 0.42% to $1 842/oz, while Platinum is higher by 1.45% to $925/oz.

Brent crude was 0.28% lower at $85.14 a barrel.

 

Currencies:

The rand traded at R18.22 against the US Dollar, R21.77 against British Pound and R189.38 against the Euro.

The Euro is weaker against the US Dollar to trade at $1.0636.