Daily Report 02 March 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 1.2% higher at the 78 631 level, as positive manufacturing data from China lifted the tech sector and resource counters.

In a trading update from MTN Group, the company said that it expects headline earnings per share (HEPS) to rise in a range of 12% to 22%. Headline EPS to be between R11.05 and R12.04, compared with R9.87 and earnings per share of between R10.30 and R11.06, compared with R7.63 in 2021.MTN plans to report earnings for the year on the 13^th of March.

Aspen Pharmacare reported a 15% drop in interim profit, the company said that it was due to inflationary pressures, supply chain issues and the drop in COVID vaccine sales. Profit for the six-month ended 31 December 2022, was R2.67 billion, compared with R3.36 billion a year ago. Headline earnings per share was at 660 cents, down from 777.2 cents posted in the year ago period. Shares of Aspen closed almost 14% higher at R160.75 per share after the company said it was close to signing new deals to revive its idled COVID-19 vaccine production lines.

Impala Platinum reported a 2.1% drop in half-year profit, as power cuts and a furnace rebuild hit smelter operations, lowering platinum group metal (PGM) production. Headline earnings per share (HEPS) fell to R16.54 in the six months to 31 December 2022, from R16.90 the previous year. Impala declared an interim dividend of R4.20 per share.

Prosus announced that they will explore all options for its classifieds OLX Autos business, due to a persistent slowdown in the second-hand car market. Prosus said that they no longer intend to pursue a global growth strategy for OLX Autos, as its operations have been impacted by ongoing macroeconomic and market challenges, including higher cost of capital and inflation. Naspers shares rose 5%, while Prosus gained more than 3% yesterday.

Harmony Gold reported an 18% increase in its half-year profit, boosted by higher metal grades and prices. Harmony did not declare an interim dividend, saying that they need to allocate capital to growth projects.

 

SA Economy:

The Absa Purchasing Managers’ Index dropped to 48.8 points in February 2023, from a seven-month high of 53 in the previous month. The latest reading indicated the first contraction in the country’s manufacturing sector since September last year, as record power outages continues to undermine business conditions.

 

Global Economy:

The unemployment rate in Germany was at 5.5% in February 2023, unchanged for a sixth consecutive month and in line with market expectations.

The S&P Global Eurozone Manufacturing PMI was at 48.5 in February 2023, slightly below 48.8 in January, and pointing to the eighth straight month of falling factory activity.

UK house prices in February dropped in annual terms for the first time since June 2020, falling by 1.1%.

The Stanbic IBTC Bank Nigeria PMI dropped to 44.7 in February 2023, from 53.5 in the prior month. The latest reading pointed to the first contraction in private sector business conditions in over two years.

Producer prices in Croatia rose 14% year-on-year in January 2023, easing from a 14.9% gain in the previous month.

The ISM report showed that US manufacturing sector contracted for a fourth consecutive month in February. The ISM Manufacturing PMI edged higher to 47.7 in February 2023 from 47.4 in January but fell short of market expectations of 48.

 

Global Company:

The FTSE 100 closed 0.49% higher at 7 770, miners Anglo American and Rio Tinto were among the top gainers, up almost 5.4% and 4.2%, respectively.

The Hang Seng Index is lower by 0.79% to 20 456, with some profit-taking evident after the index jumped over 4% yesterday.

Alibaba Group fell by 3.9% and Baidu Inc. lost 2.7% while property developer China Vanke sank 2.3%.

In China, the Shanghai Composite is trading flat at 3 308.

The Dow Jones Industrial Average closed flat 32 661, while the S&P 500 was down 0.47% to 3 951.

These moves came in tandem with an uptick in bond yields as the US 10-year yield topped 4% for the first time since November and that caused investors to stay away from tech and other high-growth stocks.

 

Commodities:

Gold is up 0.48% to $1 837/oz, while Platinum is higher by 0.66% to $961.50/oz.

Brent crude was 0.5% higher at $84.31 a barrel.

 

Currencies:

The rand traded at R18.20 against the US Dollar, R21.82 against British Pound and R19.37 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0641.