Daily Report 15 December 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 2% lower at the 74 295 level, mainly dragged down by resources and industrial shares. The JSE All-Share Index is up 0.8% year to date as inflation and recessionary risks have weighed on markets.

EOH shareholders approved a rights issue, which will see the company issue new shares to raise up to R600 million. Shareholders who hold 40% of the shares in the company took part in the vote, and all voted in support of the rights issue (100% approval rate). The proceeds of the rights issue will be used to repay R563 million for a bridge facility, which is part of an agreement with EOH’s lenders. Included in the rights offer was the issue of R100 million in shares to EOH’s empowerment partner Lebashe.

 

SA Economy:

The annual inflation rate eased to 7.4% in November 2022 from 7.6% in the prior month, below market expectations of 7.5% but still above the upper limit of the South African Reserve Bank’s target range of 3% – 6%. The main contributors to the annual inflation rate were food and non-alcoholic beverages, housing and utilities, transport, and miscellaneous goods and services.

Retail sales fell 0.6% from a year earlier in October 2022, following a downwardly revised 0.4% decrease in the previous month and compared with market forecasts of a 0.5% fall.

 

​Global Economy:

The annual inflation rate in the UK eased to 10.7% in November 2022, a small drop from 11.1% in October. The figure came below market forecasts of 10.9%.

The US Fed raised the Fed funds rate 50bp to a target of 4.25-4.50%, as expected. The statement remained the same, saying that ongoing increases may be appropriate.

China’s retail sales fell by 5.9% in November from a year ago.

China’s urban unemployment rate increased to 5.7% in November 2022 from 5.5% in the previous month

According to analyst, as China moves toward reopening a surge in infections will initially weigh on growth before the economy can rebound.

The Hong Kong Monetary Authority (HKMA) raised the base lending rate by 50 basis points to 4.75%.

 

Global Company:

The FTSE 100 closed flat at 7 795.

The Hang Seng Index is lower by 1.22% to 19 431.

In China, the Shanghai Composite is down 0.33% to 3 166.

The Dow Jones Industrial Average closed 0.42% lower to 33 966, while the S&P 500 was down 0.61% to 3 995.

Tesla shares fell over 2% after Goldman Sachs cut the price target for the company. CEO Elon Musk also sold about 22 million more shares in his electric vehicle business, which were worth around $3.6 billion.

 

Commodities:

Gold is down 0.35% to $1 807/oz, while Platinum is flat at $1 051/oz.

Brent crude was 2.44% higher at $82.70a barrel.

 

Currencies:

The rand traded at R17.24 against the US Dollar, R21.35 against British Pound and R18.36 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0647.

• THIS IS OUR LAST REPORT FOR 2022, IT WILL RETURN ON THE 9TH OF JANUARY 2023. WE WISH YOU AND YOUR LOVED ONES A MERRY CHRISTMAS AND A PROSPEROUS NEW YEAR.