Daily Report 11 October 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 3.1% higher at the 73 841 level.

Equites Property Fund Limited reported earnings results for the half year ended 31 August 2023. Equites Property Fund is a specialist owner and developer of prime logistic assets in SA and the UK. Revenue came in at R1 232.03 million compared to R1 132.19 million a year ago. Equites reported a 20% drop in its half-year distribution to shareholders, which the company said was partly to be blamed on higher interest rates. The group announced a distribution of 65.37 cents per share, down from 81.58 cents a year earlier and said it remains on track to meet full-year guidance for a distribution of 130-140 cents per share.

 

SA Economy:

The International Monetary Fund (IMF) has raised its 2023 growth forecast to 0.9%, up from its last forecast in July of 0.3% growth, due to lower-than-anticipated load-shedding. The IMF expects the South Africa’s economy to grow by 1.8% in 2024. The forecast is bleak, as South Africa faces a widening budget deficit and a number of structural impediments to growth, the IMF said.

 

Global Economy:

The German consumer price inflation came in at 4.5% year-on-year in September 2023, easing sharply from 6.1% in the previous month.

The International Monetary Fund (IMF) raised its U.S. growth projection for this year by 0.3 percentage points compared with its July update, to 2.1%. It attributed the U.S. upgrade to stronger business investment in the second quarter, resilient consumption growth amid a tight labour market and an expansionary government fiscal stance.

The IMF lowered its euro zone forecast by 0.2 percentage points, to 0.7% and also reiterated global growth forecast of 3% for the year. The Chinese economy will grow at a slower 5% in 2023 (vs 5.2% seen early) and 4.2% next year (vs 4.5%).

The yield on the US 10-year Treasury note traded around 4.65%, below the 16-year highs of 4.88% it touched last week after dovish comments from Fed officials lowered expectations of another interest rate hike this year.

The focus now turns to the US PPI due out later today and the CPI tomorrow, which will provide further clues about how inflationary pressures.

 

Global Company:

The FTSE 100 closed 1.78% higher at 7 628.

Online grocer and technology company Ocado was up 5.3%, mining stocks are also higher, with Anglo American gaining 4.7% and Antofagasta up 4.6%, banks and financial stocks also gained with Barclays rising 3.4%.

The Hang Seng Index is trading 1.89% higher at 18 000.

The Tech Index gained 2.1%, with Meituan advancing 4% to HK$116.80, Alibaba Group adding 1.5% to HK$84.65 and Tencent rising 1.1% to HK$311.60.

In China, the Shanghai Composite is up 0.27% to 3 083 on news that China is considering a new round of stimulus.

The Dow Jones Industrial Average was up 0.4% to 33 739, while the S&P 500 was higher by 0.52% to 4 358.

PepsiCo reported third quarter earnings of $2.25 per share, up from $1.97 a year earlier. Net revenue came in at $23.45 billion, up from $21.97 billion a year earlier. Analysts expected $23.41 billion. The company said it now expects 2023 EPS of $7.54, up from its prior guidance of $7.47. PepsiCo shares closed 1.9% higher.

 

Commodities:

Gold is down 0.12% to $1 859/oz, while Platinum is lower by 0.43% to $889.50/oz.

Brent crude was 0.17% higher at $87.20 a barrel.

 

Currencies:

The rand traded at R19.04 against the US Dollar, R23.40 against British Pound and R20.18 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0603.