Daily Report 21 February 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.7% higher at the 79 829 level, as optimism around China’s recovery lifted the resources sector.

In a trading update from Mpact, the company said that they expect revenue to increase about 7% to R12.4 billion. Mpact expects a 34.6% to 48.7% increase in EPS for the full year to between R4.75 and R5.25. Headline EPS is estimated to jump 32.5% to 47% to between R4.55 and R5.05.

In a trading update from City Lodge Hotels for the six months ended 31 December 2022, the group said that they expect EPS of between 16 cents and 17.8 cents, compared with a year-ago loss per share of 5.9 cents. Shares in the company fell just over 1% to R4.89 per share.

Sasol reported interim results for the six months ended 31 December 2022. The company said that the impact from the global weaker economic growth, disrupted supply chains, depressed chemical prices and the resultant higher input costs impacted the chemicals business negatively. Sasol reported HEPS of R30.90 per share vs guidance of R29.84 – R31.36 per share. EPS of R23.23 vs guidance of R21.55 – R23.98. Sasol declared an interim gross cash dividend of R7.00 per share.

Kumba Iron Ore Limited released results for the year ended 31 December 2022. The company reported revenue of R74.03 billion vs guidance of R74.29 billion. EBITDA of R37.30 billion vs guidance of R37.00 billion. Kumba declared a final dividend of R16.30 per share vs year-ago of R30.50.

BHP Group Ltd reported its first-half earnings. BHP said that weaker prices for iron ore and copper, drove a 32% on-year drop in net profit. The company declared an interim dividend of $0.90 a share, compared to a record midyear payout of $1.50 a share a year ago.

 

SA Economy:

This week Friday, the Financial Action Task Force (FATF), which sets standards on combating money laundering and illicit financing, will decide if they will add South Africa to its “Grey List.”

A report by Grant Thornton international business released last week, said that South African businesses are concerned about energy prices and economic uncertainty. The high frequency of rolling blackouts over the second half of 2022 and increasing diesel prices, have forced many businesses to close. Business sentiment dropped to 52% in the second half of 2022 from 56% in the first half.

 

Global Economy:

Electricity prices in Germany fell towards €60/MWh, their lowest level since January, because of a surge in wind power generation and an expected decline in electricity consumption as the country enters warmer weather.

Investors now await the latest FOMC meeting minutes coming out tomorrow, with prospects growing that the US central bank could increase interest rates more than previously expected to cool inflation.

Russia’s economy contracted 2.1% in 2022, after an upwardly revised 5.6% expansion in 2021, mainly due to the sanctions from Western states in retaliation to its invasion of Ukraine.

 

Global Company:

The FTSE 100 closed 0.12% higher at 8 014, hovering around the 8 000 mark as trading volumes were subdued due to the US public holiday.

The Hang Seng Index is lower by 1.55% to 20 563. Notable decliners were JD.Com falling 5.4%, Meituan down 2.2% , Lenovo Group lower by 1.5%) and Alibaba Group down 1.1%.

In China, the Shanghai Composite is up 0.11% to 3 293.

US markets were closed for a public holiday.

Meta Platforms launched a subscription service, called Meta Verified, which will let users verify their accounts using a government ID and get a blue badge. The subscription bundle for Instagram and Facebook also includes extra protection against impersonation and will be priced starting $11.99 per month on the web or $14.99 a month on Apple’s iOS system. Meta Verified will be rolled out in Australia and New Zealand this week.

 

Commodities:

Gold is down 0.08% to $1 838/oz, while Platinum is higher by 0.9% to $923.82/oz.

Brent crude was 1.27% higher at $84.07 a barrel.

 

Currencies:

The rand traded at R18.12 against the US Dollar, R21.80 against British Pound and R19.33 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0670.