Daily Report 19 January 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.6% higher at the 79 865 level, mainly boosted by resources, financials and tech shares.

Compagnie Financière Richemont SA reported that sales increased 8% for the third quarter and 18% for the nine months ended 31 December 2022. The core jewelry division led growth with an 8% increase in the quarter.

Steinhoff said that they sold 38 million shares it holds in its European discount retailer Pepco to cut its debt. Steinhoff’ shares has fallen by about 80% over the past six months.

Nampak shareholders voted to postpone a R2bn rights offer to settle at least R1.35bn in debt owed to banks, and to fund an upgrade of one of its key beverage lines. Shareholders have argued that the proposed rights offer sum was too big and that would dilute share values significantly if executed at the current share price.

In a trading update from Woolworths Holdings for the 26 weeks ended 25 December 2022, the company said that groups turnover and concession sales was up 18.5% y/y and 16.3% y/y, respectively. The food business turnover (+7.6%) and Country Road Group sales (+25.5%). The group’s interim results are scheduled to be released on or about the 1^st of March.

 

SA Economy:

South Africa’s headline consumer inflation slowed to 7.2% year on year in December from 7.4% in November, that came in line with analysts’ forecasts. On a month-on-month basis, consumer inflation was at 0.4% in December compared to 0.3% in November. The core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, moderated in December to 4.9% from 5.0% the previous month. Investors will now focus on the South African Reserve Bank’s policy meeting next week.

Retail sales rose by 0.4% from a year earlier in November 2022, following an upwardly revised 0.7% decrease in the previous month and better than market the forecasts of a 0.2% fall.

 

​Global Economy:

In China, President Xi Jinping said that he is concerned that there could be a spike in COVID infections as citizens travel for the weeklong Lunar New Year holidays beginning on Sunday.

The annual inflation rate in Croatia fell slightly to 13.10% in December 2022 from 13.50% in November 2022, easing for the first time since June 2021.

The consumer price inflation in the Euro Area slowed to 9.2% year-on-year in December 2022, down from November’s 10.1%.

US retail sales fell more than expected. Retail sales declined 1.1% month-over-month in December2022, worse than the market forecasts of a 0.8% decline.

 

Global Company:

The FTSE 100 closed 0.26% lower at 7 830.

The Hang Seng Index is higher by 0.2% to 21 722.

Tencent climbed 1.1% after China’s video games regulator granted the first gaming licences in 2023, thereby further easing an industry crackdown.

In China, the Shanghai Composite is up 0.39% to 3 236.

The Dow Jones Industrial Average closed 1.85% lower to 33 296, while the S&P 500 was down 1.58% to 3 928.

Microsoft said they plan to cut about 5% of its global workforce, or about 11 000 jobs.

 

Commodities:

Gold is down 0.15% to $1 904/oz, while Platinum is lower by 0.29% to $1 034/oz.

Brent crude was 1.11% lower at $84.98 a barrel.

 

Currencies:

The rand traded at R17.14 against the US Dollar, R21.14 against British Pound and R18.50 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0796.