SA Company News:
The Johannesburg Stock Exchange All-Share Index closed 1.18% higher at the 83 799 level.
The JSE experienced its fifth consecutive session of gains, driven primarily by the resource stocks, particularly gold miners, as well as financials. This upward trend was further supported by growing optimism surrounding potential interest rate cuts by the Federal Reserve, which helped maintain positive market sentiment.
Thungela Resources reported its financial results for the six months ended 30 June 2024. The company said that headline earnings per share (HEPS), fell by approximately 58% to R9.52 for the six months ended June. This downturn was primarily attributed to a softening in coal prices. Revenue came in at R16.75 billion, compared with R14.36 billion a year ago. The coal miner has also cut its interim dividend by 80% and said that they will pay out R2 per share, compared with R10 in the previous comparative period. The company has also announced a share buyback programme to the value of R160 million which is expected to be implemented during the second half of the year.
Sasol reported a 66% fall in full-year profit due to weaker chemical prices. Earnings swung from a profit of R9.33 billion in 2023 to a substantial loss of R44.25 billion in 2024. Its EBITDA also swung to a loss of R27.31 billion, an over 220% decrease from the prior period. Basic earnings per share fell from a profit of R14 per share in 2023 to a loss of R69.94 in 2024. Sasol said that this was mainly due to asset impairment, lower earnings before interest, tax, depreciation, and amortisation, and translation losses compared to gains in the prior year, together with lower derivative gains compared to the prior year. No final dividend was declared.
SA Economy:
Citigroup said that it has raised its forecast for SA’s GDP growth to 1.2% this year and to 2% next year. This optimistic outlook was attributed to several factors, such as the positive impact of the two-pot retirement reform, a decrease in inflation, and anticipated interest rate cuts. These factors are expected to boost consumer spending following a period of high inflation and elevated debt levels.
The South African Reserve Bank (SARB) is anticipated to cut interest rates by 25 basis points to 8.00% at its next meeting on September 19, making it the first reduction in over two years, with another similar cut expected in November. The upcoming release of July’s inflation data by Stats SA tomorrow, will make it clearer whether inflation is cooling down fast enough for the SA Reserve Bank to consider easing monetary policy. However, if inflation remains stubbornly high, the SARB may need to maintain a more cautious stance.
Global Economy:
The People’s Bank of China kept its one and five-year loan prime rates unchanged at 3.45% and 3.85%, respectively, in line with market expectations.
Global Company:
The FTSE 100 closed 0.54% higher at 8 356.
China and Hong Kong dipped lower, reflecting investor concerns over recent economic data that provided little reassurance about the region’s economic health. The market sentiment was further dampened by the absence of new stimulus measures from the government, leading investors to remain cautious and sit on the sidelines.
The Hang Seng Index is trading 0.37% lower at 17 503.
In China, the Shanghai Composite is down 1.08% to 2 862.
The Dow Jones Industrial Average closed 0.58% higher to 40 896, while the S&P 500 closed 0.96% higher at 5 608.
AMD shares surged 4.5% after the company announced its acquisition of ZT Systems, an artificial intelligence infrastructure provider. On the downside, HP Inc. shares fell 3.7% after Morgan Stanley downgraded the stock from overweight to equal weight.
Commodities:
Gold is trading higher by 0.03% at $2 502/oz, while Platinum is higher by 0.81% to $964.65/oz.
Brent crude was 2.87% lower at $76.63 a barrel.
Currencies:
The rand traded at R17.74 against the US Dollar, R23.03 against British Pound and R19.65 against the Euro.
The Euro is slightly firmer against the US Dollar to trade at $1.1075.
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| Market Indicators | |||||||
| Commodities $ | Cross Currencies ($) | Major Indices | |||||
| Gold | 2502.10 | 0.03% | USD/ZAR | 17.74 | Top40 | 76665.23 | 1.25% |
| Platinum | 964.65 | 0.81% | GBP/ZAR | 23.03 | Dow 30 | 40896.53 | 0.58% |
| Brent | 76.63 | -2.87% | EUR/ZAR | 19.65 | S&P 500 | 5608.25 | 0.96% |
| Copper | 4.16 | 0.24% | EUR/USD | 1.1075 | FTSE | 8356.94 | 0.54% |
| Palladium | 926.08 | -1.83% | USD/JPY | 147.20 | DAX | 18421.69 | 0.54% |
| Iron Ore | 94.15 | 0.42% | BITCOIN | 61008.00 | Shanghai | 2862.62 | -1.08% |
| Source: FACTSET | |||||||