Daily Report 19 October 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.2% higher to the 66 351 level.

Combined Motor Holdings Limited (CMH) reported interim results for the six months ended 31 August 2022.

CMH’s revenue rose 12% to R6.15 billion. Basic and headline earnings per share was up 51% to R3.02. Rising vehicle sales and prices helped lift the group’s performance, with volumes up 17%, compared to national average sales growth of 12%. A dividend of 168 cents per share will be paid on Monday, 19 December 2022.

Insimbi reported results for the six months ended 31 August 2022, where the company said that revenue rose 0.72% to R3.1 billion in the six months to end-August, but profit jumped 46.6% to R67.36 million, with the firm benefiting as prices of metals and energy surged in the wake of Russia’s invasion of Ukraine. The company also said that its profits did take a knock from duties imposed on the export of scrap metals, while transport costs had also increased. Insimbi declared a 3c per share dividend.

BHP Group said in an operational update for the quarter ended 30 September 2022, that copper production was up 9% to 410 100 tons, total iron ore production increased by 3% to 64 million metric tons and coal was marginally lower than the prior period at 7 million metric tons. BHP Chief Executive Officer, Mike Henry said that they have started the new financial year strongly and continued to make progress towards its decarbonisation targets and goals.

The operating update from DRDGOLD, said that for the quarter ended 30 September 2022, gold production increased by 1% from the previous quarter, to 1 453kg primarily due to a 1% increase in tonnage. As a result, the cash operating costs per kilogram of gold sold have increased marginally from the previous quarter to R658,530/kg. The cash operating costs per ton of material remained stable from the previous quarter at R133/t.

 SA Economy:

The finance minister, Enoch Godongwana said that he will provide details on the size, timing, and conditions of the Eskom debt relief package when he tables his medium-term budget policy statement on October 26. Godongwana also said he will say something about Transnet in the budget statement.

Transnet said that worker activity at its operations has returned to levels as high as 80% and that the South African Transport and Allied Workers Union (SATAWU) said they want until tomorrow to consult membership on the wage deal.

 ​Global Economy:

The ZEW Indicator of Economic Sentiment for Germany rose slightly by 2.7 points to -59.2 in October 2022 from the previous month’s 14-year low of -61.9, and above market expectations of -65.7. Still, the latest reading suggested investors remain pessimistic regarding the economic outlook over the next six months.

The UK inflation rate increased to 10.1% as food and energy prices continue to rise.

 Global Company:

The FTSE 100 closed 0.2% higher at 6 936.

The Hang Seng Index fell 1.87% to 16 603.

Goldman Sachs analyst expects Tencent’s third-quarter earnings report, that is due on the 16^th of November, to show a 1% drop in revenue and an 8% decline in profit for the third quarter amid weakness in the group’s gaming, advertising and fintech units. Tencent shares slipped 3.85% to HK$244.60.

In China, the Shanghai Composite fell 0.95% to 3 051, as the delay of key economic data made it worse for an already highly uncertain outlook for the world’s second largest economy.

The Dow Jones Industrial Average rose by 1.12% to 30 523, while the S&P 500 climbed 1.14% to 3 719. Better-than-expected quarterly results from Goldman Sachs Group Inc, Johnson & Johnson and Lockheed Martin helped U.S. indices rally. Netflix also gained on an earnings and revenue beat, as well as strong subscriber growth numbers.

 Commodities:

Gold is down 1.06% to $1 643/oz, while Platinum is lower by 3.07% to $894.50/oz.

Brent crude was 2.5% lower at $90 a barrel.

 Currencies:

The rand traded at R18.13 against the US Dollar, R20.48 against British Pound and R17.84 against the Euro.

The Euro is flat against the US Dollar to trade at $0.9832.