Daily Report 03 February 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed flat at the 79 802 level.

Anglo American said that production rose 10% in its fourth quarter to end-December, boosted by production at its major copper development, Quellaveco in Peru. Copper production therefore jumped 52% year on year in the last quarter. Anglo’s subsidiary, diamond miner De Beers, reported a 6% climb in diamond production.

Kumba Iron Ore grew its fourth quarter production by 3%. Year on year, iron ore sales fell 9% to 36.6 million tonnes. Kumba said it expects headline earnings per share (HEPS) to be between R58.29 – R64.49 in the full year to December 2022, compared to R103.65 the previous year. Kumba will release its financial results on the 21^st of February.

In a trading update from Super Group, the company said that they expect a 30% to 40% growth in revenue and a 25% to 35% rise in EPS for the six months ended 31 December 2022. Revenue is estimated between R28.1 billion and R30.3, compared with R21.6 a year ago, and EPS is forecast to rise to between R2.377 and R2.568 from R1.909.

RCL Foods said that its headline EPS for the fiscal first half ended December 2022 will between 53.2 cents and 58.1 cents, reflecting a 26.8% fall from the prior-year period. The company said it was severely impacted by high commodity input prices, above-inflationary price increases for energy and packaging costs, and unprecedented levels of load shedding.

 

SA Economy:

A survey conducted by DebtBusters, a company that helps consumers manage debt, showed that while 2022 nominal incomes were on par with 2016, buys 33% less with the money earned six years ago when cumulative inflation is factored in. The data also showed that consumers who take home more than R20 000 a month use 68% of their income towards debt repayments.

 

Global Economy:

The Bank of England raised its key interest rates by 50bps to 4%.

The ECB raised its key interest rate by 50bps to 2.5%.

The trade surplus in Germany increased to €9.7 billion in December 2022 from €6.3 billion from the previous year.

The number of Americans filing new claims for unemployment benefits fell by 3 000 from the previous week to 183 000 and well below market expectations of 200 000.

The release of the US nonfarm payrolls report due later today will be in focus. The economy is expected to have created about 185 000 jobs in January.

The Caixin China General Services PMI increased to 52.9 in January 2023 from 48.0 in December.

 

Global Company:

The FTSE 100 closed 0.76% higher at 7 820. Shares held onto gains after the BoE decision, led higher by gains in real estate and consumer discretionary stocks.

Shell reported annual profit of $39.9bn, more than doubling from a year ago. The company said these gains were driven by higher oil and gas prices, robust refining margins and a strong performance from Shell’s trading business.

Asian equity markets were trading lower after disappointing earnings from major US firms weighed on sentiment.

The Hang Seng Index is lower by 1.65% to 21 596.

In China, the Shanghai Composite is down 0.96% to 3 254.

The Dow Jones Industrial Average closed 0.11% lower to 34 053, while the S&P 500 was up 1.45% to 4 179.

Apple and Google-parent Alphabet both missed estimates on the top and bottom lines for their December quarters. Alphabet’s stock fell nearly 4% in extended hours, while Apple shares were down 3.2%.

Amazon’s stock also dropped about 4.2%.

 

Commodities:

Gold is down 0.6% to $1 916.30/oz, while Platinum is higher by 3.02% to $1 023.50/oz.

Brent crude was 0.82% lower at $82.17 a barrel.

 

Currencies:

The rand traded at R17.08 against the US Dollar, R20.87 against British Pound and R18.61 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0893.