Daily Report 24 February 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 1.1% higher at the 79 011 level.

Bidcorp released results for the half year ended 31 December 2022. The company said that headline earnings per share from total operations grew 45.3% to R9.70 per share from R6.55 a year ago, in line with guidance. Net revenue increased 28.1% y/y to R91.8 billion, benefiting from high inflation and real double-digit growth in activity levels. All divisions exceeded pre-Covid levels. Bidcorp declared an interim dividend of 440 cents per share. Management remains confident that the group will continue to deliver real growth in 2H23.

Anglo American PLC said that net profit for 2022 fell, dragged down by higher energy costs and lower commodity prices. Revenue came in at $35.12 billion from $41.55 billion a year ago, below the company-provided consensus forecast of $36.88 billion. Anglo American declared a final dividend of $0.74 a share, in line with its 40% payout policy.

In a trading update from Momentum Metropolitan Holdings, said that they expect earnings per share (EPS) for the six-month period to be between R1.67 and R1.76, reflecting growth of 242% to 260%.

Discovery said profit for the six-months to end-December 2022 fell 11% to R2.943 billion, down from R3.305 billion the previous year. EPS decreased to R4.367 from R4. 925.As a result, Discovery opted to continue with the policy of withholding dividend payments, and this will be revisited at the end of the financial year.

Truworths released results for the 26 six weeks ended, 1 January 2023. Earnings per share (EPS) rose to R5.021 from R4.478 and revenue rose to R11.73 billion, up from R10.28 billion. Truworths declared a dividend of R3.20 rand per share, payable on the 20^th of March.

 

SA Economy:

The Producer Price Inflation (PPI) eased for the sixth straight month to 12.7% in January 2023, in line with market estimates of 12.75%.

Stats SA said that power generation was down 1.7% year on year in November 2022. In the 11 months to end-November, Eskom’s contribution was 193 648 GWh, a decline of 3.6% from the same period a year earlier. The persistent power cuts are continuing to hamper economic growth as businesses and factories scramble to keep the lights on. Eskom announced that stage 6 load-shedding, which removes 6 000MW of power from the grid, will continue until further notice after more plant breakdowns.

 

Global Economy:

The annual inflation rate in Hong Kong rose to 2.4% in January 2023, accelerating from 2% in the previous month. The upward pressures came from clothing & footwear (5.8% vs 5.1%), miscellaneous goods (1% vs 0.5%) and services (2% vs 1.9%).

Chinese premier, Li Keqiang said that the economy is facing many challenges, amid a property slump and weak global demand. The market is also anticipating a government reshuffle, especially of the economic team, and 2023 economic targets during an annual session of parliament in March.

China-U.S. relations is also focus now, following news reports that the U.S. plans to increase the number of troops deployed to Taiwan.

U.S. Gross Domestic Product (GDP) increased 2.7% in the fourth quarter; economists were forecasting a 2.9% rise.

 

Global Company:

The FTSE 100 closed 0.89% lower at 7 907,

The Hang Seng Index is lower by 1.38% to 20 070.

Alibaba Group fell 4.3%, amid increasing risks from a macroeconomic slowdown to their businesses.

In China, the Shanghai Composite is down 0.74% to 3 267.

The Dow Jones Industrial Average flat at 33 153, while the S&P 500 was up 0.37% to 4 012.

Intel Corp and Qualcomm Inc rose 0.6% and 1.8%, respectively after Nvidia Corp posted upbeat earnings and gained almost 14% yesterday.

 

Commodities:

Gold is down 0.83% to $1 818/oz, while Platinum is lower by 0.33% to $939/oz.

Brent crude was 1.02% lower at $82.21 a barrel.

 

Currencies:

The rand traded at R18.22 against the US Dollar, R21.90 against British Pound and R19.31 against the Euro.

The Euro is weaker against the US Dollar to trade at $1.0598.