SA Company News:
The Johannesburg Stock Exchange All-Share Index closed 1.04% higher at the 81 668 level.
FirstRand reported a 4% rise in annual profit despite absorbing a R3 billion ($167 million) pre-tax accounting provision related to an investigation by Britain into the vehicle finance market. Normalised earnings rose to R38 billion for the year ended 30 June from R36.6 billion the previous year. Group CEO, Mary Vilakazi said that excluding the provision, normalised earnings grew by 10%. FirstRand’s net income grew strongly, by 7% to R128.8 billion. However, the growth in its costs outstripped this by 4%, negatively impacting profit margins. The company declared a final gross cash ordinary dividend totalling 215 cents per ordinary share to be paid out of income reserves.
Discovery Ltd released a trading update for the year ended 30 June 2024, ahead of its full financial results on September 19. Discovery is anticipated to deliver a mixed performance for its 2024 financial year. While its South African and Vitality Global divisions showed strong results, its UK operations experienced a notable downturn. The company expects headline earnings to increase by between 4% and 9%. Normalised headline earnings (NHE) are expected to have increased by between 12% and 17% and normalised profit from operations is expected to have increased by between 15% and 20%.
Sibanye Stillwater Ltd released its results for the six months ended 30 June 2024. The company reported a 9% decline in revenue to R55.2 billion, which it attributed to lower commodity prices. Sibanye also reported a sharp decline in basic earnings, dropping from a profit of R7.42 billion in H1 2023 to a loss of R7.47 billion, a decrease of over 200%. The miner’s adjusted EBITDA also fell by 53%, down to R6.65 billion. Although Sibanye avoided a headline loss, it still reported headline earnings of R137 million, a significant 98% drop from the previous year.
SA Economy:
Mining production decreased by 1.4% year-on-year in July 2024, following a revised 3.6% drop in June, making the second consecutive month of declines. The largest negative contributors were platinum group metals (PGMs), which fell by 4.8%, subtracting 1.3 percentage points, and iron ore, which dropped 9.5%, shaving off 1.2 percentage points. Gold production also declined by 4.9%, reducing output by 0.5 percentage points.
Global Economy:
US Producer Price Index (PPI) for August rose by 0.2% month-over-month, slightly higher than the estimated 0.1% increase. Year-over-year, the PPI for August increased by 1.7%, slightly below the estimated 1.8% and down from the previous 2.2%. The Core PPI, which excludes food and energy, rose by 0.3% month-over-month, surpassing the estimated 0.2% and up from 0% in the prior month. Year-over-year, the Core PPI for August increased by 2.4%, in line with the prior month’s figure but slightly below the estimated 2.5%.
The European Central Bank’s (ECB) cut interest rates by 25 basis points, making it the second rate reduction this year. The ECB’s key rate now stands at 3.5% and did not signal future rate moves.
Global Company:
The FTSE 100 closed 0.57% higher at 8 240. The FTSE 100 rebounded from the previous day’s losses as risk appetite improved following U.S. inflation data that reinforced hopes of a Fed rate cut next week. Miners led gains, with Antofagasta (+3.3%), Glencore (+3%), Anglo American (+2.5%) and Rio Tinto (+1.6%).
The Hang Seng Index is trading 1.05% higher at 17 422. Hong Kong shares are trading higher after Chinese President Xi Jinping called for more efforts to achieve the country’s annual GDP growth target of around 5% this year.
In China, the Shanghai Composite is trading flat at 2 715.
The Dow Jones Industrial Average closed 0.57% higher to 41 96, while the S&P 500 closed 0.74% higher at 5 595.
Leading the rally were the major tech companies, with Nvidia up 1.9% and Alphabet and Meta Platforms higher by 2.3% and 2.7%, respectively. All sectors closed in the green, with communication services and consumer discretionary stocks also closing with strong gains.
Commodities:
Gold is trading higher by 1.95% at $2 569/oz, while Platinum is higher by 2.54% to $989.74/oz.
Brent crude was 1.46% higher at $72.13 a barrel.
Currencies:
The rand traded at R17.72 against the US Dollar, R23.32 against British Pound and R19.66 against the Euro.
The Euro is slightly firmer against the US Dollar to trade at $1.1085.
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| Market Indicators | |||||||
| Commodities $ | Cross Currencies ($) | Major Indices | |||||
| Gold | 2569.10 | 1.95% | USD/ZAR | 17.72 | Top40 | 74089.56 | 1.17% |
| Platinum | 989.74 | 2.54% | GBP/ZAR | 23.32 | Dow 30 | 41096.77 | 0.57% |
| Brent | 72.13 | 1.46% | EUR/ZAR | 19.66 | S&P 500 | 5595.76 | 0.74% |
| Copper | 4.22 | 0.71% | EUR/USD | 1.1085 | FTSE | 8240.97 | 0.57% |
| Palladium | 1053.23 | 2.50% | USD/JPY | 140.89 | DAX | 18518.39 | 1.02% |
| Iron Ore | 94.55 | 0.58% | BITCOIN | 57956.00 | Shanghai | 2715.37 | -0.06% |
| Source: FACTSET | |||||||