Daily Report 17 October 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.31% higher at the 73 147 level, as investors continue to assess the latest developments in the Israel-Hamas war in the Middle East.

The JSE said that wealth management company, Sasfin Holdings has missed the cut-off for releasing financial statements and stands to be suspended from the JSE should it not release them by the end of October. Companies are supposed to release results within three months of their year-end, which in Sasfin’s case was at the end of June. Sasfin said the delay was because the company’s external audit has not been completed.

Calgro M3 released financial results for the six months ended 31 August 2023. Results was in line with guidance, headline earnings per share (HEPS) rose 38.4% y/y to 78.9 cents. Revenue increased by 13.5% to R688.9 million from R607.1 million in 2022, driven mainly by their residential property development business. No dividend was declared for the period ended as management opted to hold onto the money to fund possible growth as well as reduce debt and interest.

 

SA Economy:

Government services such as hospitals, home affairs and grant payments across the country could be without technical support from tomorrow as thousands of State Information Technology Agency (SITA) employees will down tools after salary negotiations reached a deadlock. Unions are demanding a 7.5% wage hike.

The Consumer Price Inflation (CPI) data for September is due out tomorrow and headline CPI likely to have accelerated to 5.4% y/y, from 4.8% y/y in August, on the back of a significant rise in fuel prices. Core CPI is expected to have remained contained around 4.7% y/y during September.

 

Global Economy:

The Euro Area recorded a trade surplus of EUR6.7 billion in August 2023, compared with a deficit of €54.4 bn in August 2022. Imports dropped by 24.6% to EUR214.9 billion, while exports fell 3.9% to EUR221.6 billion.

The annual inflation rate in Croatia came in slightly higher at 6.7% in September 2023 from a preliminary figure of 6.6%, but still marking it the lowest reading since February 2022.

Nigeria’s annual inflation rate accelerated to reach an over 18-year high of 26.7% in September 2023, up from August’s 25.8%, mainly attributed to second-round effects of the removal of fuel subsidies and the devaluation of the naira.

In the latest quarterly survey by The Wall Street Journal, business and academic economists lowered the probability of a recession in the US within the next year, from 54% on average in July to 48%. This is the first time they have put the probability below 50% since the middle of last year.

China’s third quarter gross domestic product figures due out tomorrow, with economists expecting a 4.4% year-on-year expansion.

 

Global Company:

The FTSE 100 closed 0.41% higher at 7 630.

A rebound in base metals prices supported Rio Tinto, Anglo American, and Glencore, all rising between 1.5% and 2.8%.

The Hang Seng Index is trading 1.2% higher at 18 171.

In China, the Shanghai Composite is up 0.08% to 3 076.

The Dow Jones Industrial Average was up 0.92% to 33 984, while the S&P 500 was higher by 1.05% to 4 373.

Gains were seen in high growth stocks with Tesla (+1.1%), Nvidia (+1.4%), Microsoft (+1.5%), Amazon (+2.1%) and Meta Platforms (+2.1%).

Charles Schwab shares rose 4.7% after the company reported a smaller-than-expected drop in quarterly profit.

 

Commodities:

Gold is at $1 915/oz, while Platinum is higher by 1.03% to $892.20/oz.

Brent crude was 1.17% lower at $88.59 a barrel.

 

Currencies:

The rand traded at R18.80 against the US Dollar, R22.94 against British Pound and R19.83 against the Euro.

The Euro is slightly weaker against the US Dollar to trade at $1.0547.