Daily Report 16 May 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed slightly lower at the 78 261 level.

British American Tobacco rose 0.5% after it was announced that Finance Director Tadeu Marroco will take over as chief executive, replacing Jack Bowles, who is stepping down with immediate effect.

In a trading update from logistics group KAP Limited the company said that they earnings for the year ending 30 June to drop by at least 30% year over year if current trading conditions persist. The company highlighted that the operating environment in South Africa was demanding in the past 10 months, with the impact of loadshedding on clients’ operations and the softening of domestic customer demand was worse than anticipated. KAP now expects headline earnings per share to decrease by 30% to 52.1c and earnings per share from continuing operations by a similar margin to 49.2c.

MTN Group said that they plan to build an inland fiber cable network worth $320 million in a bid to connect 10 countries in Africa. The East2West link project will add about 20 000 kilometers of new cable and interconnect over 100 000 kilometers of fiber and will cover countries including Nigeria, Kenya and Congo.

 

SA Economy:

The focus today will be on the unemployment rate. The unemployment rate fell slightly in the fourth quarter to 32.7%, remaining well above pre-pandemic levels. Economists surveyed by Bloomberg expects the unemployment rate to increase slightly to 32.9% and to reach 33% at the end of the second quarter.

 

Global Economy:

The Eurozone industrial production fell 1.4% y/y in March versus consensus for 0.9% gain.

US Treasury Secretary, Janet Yellen stated in an interview with the Wall Street Journal that the two political parties, the Biden administration and the congressional Republicans were making progress in their negotiations concerning federal spending and raising the debt limit.

China’s retail sales increased by 18.4% from the prior year in April 2023, missing market forecasts of 21.0%, but accelerating from a 10.6% gain in the prior month.

China’s unemployment rate declined to 5.2% in April 2023 from 5.3% in the previous month.

China’s industrial production expanded by 5.6% year-on-year in April 2023, missing market forecasts of 10.9%, while rising from a 3.9% rise in March. While the readings still advanced, falling behind market expectations points to a staggered recovery China’s economy.

Britain’s unemployment rate rose to 3.9% in the three months to end March.

 

Global Company:

The FTSE 100 closed 0.3% higher at 7 777. BHP, Glencore, Antofagasta and Rio Tinto were among the mining sector’s biggest risers.

The Hang Seng Index is higher by 0.11% to 20 004, mainly led higher by gains in tech, consumer and financial shares.

In China, the Shanghai Composite is up 0.69% to 3 305.

US markets closed higher, led by materials, financials and technology.

The Dow Jones Industrial Average closed 0.15% higher to 33 348, while the S&P 500 was up 0.3% to 4 136.

The European Union regulators approved Microsoft’s proposed $69 billion acquisition of gaming firm Activision Blizzard.

 

Commodities:

Gold is up 0.17% to $2 018/oz, while Platinum is higher by 0.71% to $1 077/oz.

Brent crude was 1.74% higher at $75.48 a barrel.

 

Currencies:

The rand traded at R19.05 against the US Dollar, R23.86 against British Pound and R20.72 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0876.