Daily Report 02 February 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.4% higher at the 79 817 level.

Harmony Gold Mining said that it is on track to achieve its full-year production target, despite the power shortages. The company expects to achieve between 1.4-million and 1.50-million ounces of gold in the year to end-June at an all-in sustaining cost of less than R900 000/kg. Harmony, which also has operations in Papua New Guinea, expects to report gold production between 720 000 ounces and 745 000 ounces for the six months to December 2022. The company will release its financial results for the half year on the 1^st of March.

Glencore PLC reported production figures for 2022 which were overall in line with guidance provided for in October, but the slide in production reflects a range of issues including asset sales, production problems and supply-chain issues. Glencore said its copper production fell 12% to 1.1 million metric tons last year. Copper guidance for 2023 stood at 1.0 million metric tons, plus or minus 30 000 tons, Cobalt production rose 40% and zinc down 16% to 938 500 metric tons.

Bidcorp’s share price rose about 7% to R382.04 after the company announced that headline earnings per share (HEPS) for the six months to end-December are expected to be between 960c and 980c a share, a rise of 43% – 49% from the same period a year earlier. The group is scheduled to publish its financial statements for the period on or about February 22.

Anglo American Platinum said that the company it expects production of platinum group metals, or PGM, in financial year 2023 to match or be lower than 2022 production levels, which dropped 6% from the prior-year period. The company expects PGM production and refined PGM production to be between 3.6 million ounces and 4 million ounces for 2023.

 

SA Economy:

The seasonally adjusted Absa Purchasing Managers’ Index came in at 53 points for January 2023, almost unchanged from a seven-month high of 53.1 in December and remaining above the 50-point mark that separates expansion from contraction.

 

Global Economy:

The S&P Global/BME Germany Manufacturing PMI was revised slightly higher to 47.3 in January 2023 from a preliminary reading of 47.

Hong Kong’s economy shrank by 4.2% year-on-year in the fourth quarter of 2022, while analysts expected it to contract by a softer 2.9%. The decline in GDP was mainly attributable to the weak performance in external trade during the quarter, with exports of goods falling 24.8%.

Inflation in the Eurozone slowed by more than expected in January, the Consumer Price Index (CPI) dropped by 0.4% month-on-month during the period. On an annual basis, the rate of inflation decelerated to 8.5%, down from 9.2% in the prior month and below economists’ predictions of 9.0%.

Private businesses (ADP report) in the US created 106 000 jobs in January 2023, well below market forecasts of 178 000.

The US Federal Reserve raised its interest rate by 25 basis points to 4.50% – 4.75% and said that they have made progress in the fight against inflation.

The Hong Kong Monetary Authority (HKMA) also raised its interest rate by 25bps to 5.0%.

 

Global Company:

The FTSE 100 closed 0.14% lower at 7 761.

GSK PLC reported net profit of 1.50 billion pounds ($1.85 billion) in the fourth quarter, up from GBP749 million for the same quarter of 2021, on sales that grew to GBP7.33 billion from GBP7.08 billion.

BMW said it has raised its suggested retail prices for some models sold in China due to higher raw material and logistics costs globally.

The Hang Seng Index is higher by 0.21% to 22 108.

In China, the Shanghai Composite is up 0.19% to 3 292.

The Dow Jones Industrial Average closed flat at 34 092, while the S&P 500 was up 1.03% to 4 119.

Meta shares gained nearly 19% in extended hours trading after the company reported stronger-than-expected fourth quarter revenue and announcing a $40 billion share buyback.

Advanced Micro Devices (AMD) also advanced 12.6% on its upbeat earning reports.

 

Commodities:

Gold is down 0.09% to $1 927.80/oz, while Platinum is lower by 1.95% to $992.60/oz.

Brent crude was 1.99% lower at $82.84 a barrel.

 

Currencies:

The rand traded at R17.05 against the US Dollar, R21.13 against British Pound and R18.79 against the Euro.

The Euro is firmer against the US Dollar to trade at $1.1019.