SA Company News:
The Johannesburg Stock Exchange All-Share Index closed 0.73% higher at the 82 824 level.
MTN Group reported lower earnings and service revenue for the first half of the year, citing a challenging environment, despite increased number of subscribers. MTN said that service revenue fell to R85.32 billion from R107.735 billion for the same period a year earlier. Earnings before interest, taxes, depreciation, amortization before once-off items–one of the company’s preferred metrics–declined to R29.05 billion from R49.41 billion. The EBITDA margin fell to 32% from 43.6% due to cost pressure from challenging conditions, the company said. At the end of the period, MTN’s total subscriber numbers were up 0.8% to 288 million. The board did not declare any interim dividend for the period. MTN Group maintained its medium-term guidance and still anticipates capital expenditure of 28 billion to 33 billion rand in 2024. The board plans to pay a minimum final dividend of 330 cents per share for the year.
ABSA released its results for the first half of its 2024 financial year, which showed a decrease in earnings and profit for the bank. Headline earnings decreased 5% to R10.18 billion from R10.72 billion the year prior, and diluted headline earnings per share declined 5% to 1,227.7 cents from 1,289.1 cents in H1 2023. Revenue grew 3% to R53.7 billion, as net interest income rose 7% to R35.31 billion and non-interest income decreased 2% to R18.4 billion. ABSA declared an ordinary dividend per share of 685 cents per share. ABSA also announced today that, following engagements between the board and its CEO, Arrie Rautenbach, the parties agreed that Rautenbach will take early retirement from the company, effective 15 April 2025.
SA Economy:
The upcoming release of the leading business cycle indicator for June will be released tomorrow. In May, the indicator decreased by 1.0% month-over-month to 111.9 index points from 113.0 in April. Despite this monthly decline, the indicator remained 2.0% higher than the same period a year ago. This suggests that while there may be short-term fluctuations, the overall trend has shown some resilience over the past year.
Also, the Consumer Price Inflation (CPI) data for July is due out on Wednesday will be pivotal for understanding the current economic climate. In June, headline inflation stood at 5.1% year-over-year, a slight decrease from 5.2% in May, with a modest monthly increase of 0.1%. This slight decline suggests some easing in inflationary pressures.
Global Economy:
UK’s retail sales rebounded in July to 0.5% m-o-m from -0.9% in June as wage growth and looser fiscal policy helped households to deal with cost-of-living pressures.
Investors will now turn their focus to the Federal Reserve’s Jackson Hole Economic Symposium, scheduled for August 22-24. The theme will be “Reassessing the Effectiveness and Transmission of Monetary Policy,” suggesting that investors may have to digest a lot of commentary, not only from Fed Chair Powell and his colleagues, but from other major central bankers as well.
Global Company:
The FTSE 100 closed 0.43% lower at 8 311.
Hong Kong shares is trading higher, led by tech stocks, after earnings release by e-commerce giants Alibaba and JD.Com helped lift sentiment.
The Hang Seng Index is trading 0.88% higher at 17 580.
In China, the Shanghai Composite is up 0.44% to 2 891.
The Dow Jones Industrial Average closed 0.24% higher to 40 659, while the S&P 500 closed 0.2% higher at 5 554. For the week, the S&P 500 gained over 4%, the Nasdaq rose 5.5%, and the Dow Jones 3.5%.
Walmart shares rose by 0.65% after the US retailer raised its outlook for both revenue and profits. The positive sentiment was further boosted by a reduction in losses within its e-commerce business, which has contributed favorably to the company’s overall profitability.
Commodities:
Gold is trading higher by 1.85% at $2 501/oz, while Platinum is higher by 0.29% to $956.80/oz.
Brent crude was 1.75% lower at $78.83 a barrel.
Currencies:
The rand traded at R17.82 against the US Dollar, R23.10 against British Pound and R19.69 against the Euro.
The Euro is firmer against the US Dollar to trade at $1.1048.
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| Market Indicators | |||||||
| Commodities $ | Cross Currencies ($) | Major Indices | |||||
| Gold | 2501.35 | 1.85% | USD/ZAR | 17.82 | Top40 | 75706.13 | 0.71% |
| Platinum | 956.80 | 0.29% | GBP/ZAR | 23.10 | Dow 30 | 40659.76 | 0.24% |
| Brent | 78.83 | -1.75% | EUR/ZAR | 19.69 | S&P 500 | 5554.25 | 0.20% |
| Copper | 4.15 | 0.48% | EUR/USD | 1.1048 | FTSE | 8311.41 | -0.43% |
| Palladium | 943.07 | 0.17% | USD/JPY | 145.73 | DAX | 18322.40 | 0.76% |
| Iron Ore | 93.75 | 1.76% | BITCOIN | 58516.00 | Shanghai | 2891.86 | 0.44% |
| Source: FACTSET | |||||||