Daily Report 21 October 2022

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.2% higher to the 68 108 level, with Sasol shares plunging 8%, after the company published its production and sales performance metrics for the 3 months ended 30^th September.

Sasol’s share price fell after the company said that they have declared force majeure. Sasol said they are unable to quantify the impact on the South African value chains, as the extent and timing to clear the backlogs across the port and rail system remain uncertain. Sasol also said that a fire had occurred at the new Ziegler alcohol unit at the Lake Charles Chemicals Complex in the US.

Clicks Group gained over 6% after reporting a jump in annual earnings. Clicks Group continued to show resilience by delivering an 11.9% increase in adjusted diluted headline earnings per share. Group turnover is up 6.0% and its dividend is up 30.0% to 637 cents per share for the year, in line with group HEPS which grew by 33.5%. Clicks declared final gross ordinary dividend for the period ended 31 August 2022 of 457.0 cents per share.

Gemfields shares dropped almost 10% after it said it had ceased operations at its Montepuez Ruby Mine (MRM) in Mozambique following an attack at a neighbouring operation. The attack has been attributed to insurgent activity.

In a trading update from Raubex for the six months ended 31 August 2022, the company said that it expects earnings per share and headline earnings per share to be between 10% and 20% higher than the earnings per share and headline earnings per share from the previous corresponding period.

 

SA Economy:

Crypto assets are to be treated as financial products in South Africa, to make it easier for regulators to monitor the market and help to safeguard consumers. The Financial Sector Conduct Authority defined crypto assets as “a digital representation of value” in a gazette notice published yesterday.

According to the South African Association of Freight Forwarders (SAAFF), the 11-day strike, which started on the 6^th of October, caused South Africa to lose the opportunity to move R65.3 billion worth of goods and a complete return to normality may only happen in 2023.

 

​Global Economy:

Hong Kong’s unemployment rate fell to 3.9% in the three months ending September 2022, from 4.1% in the previous three-month period.

The Euro Area posted a current account deficit of EUR 20.21 billion in August 2022, compared with a EUR 21.05 billion surplus in the same month a year earlier.

UK Prime Minister, Liz Truss announced that she was resigning following a turbulent 45 days in office which has seen a market crash and a U-turn on her budget proposals. The announcement came as Britain faces risks of recession amid political and financial turmoil, the surge in natural gas prices, post-COVID supply-chain bottlenecks and labour shortages.

Retail sales in the UK dropped 1.4% month-over-month in September 2022, following a revised 1.8% decline in August, while analysts expected it to decline a modest 0.5%.

 

Global Company:

The FTSE 100 closed 0.27% higher at 6 943, led by gains coming from the energy and real estate companies.

The Hang Seng Index fell 0.39% to 16 219. The index was the worst performer in the region this week, heading for a weekly loss of 2.4%. Technology shares in the Hang Seng were the hardest hit by rising U.S. Treasury yields and renewed concerns over a U.S. restriction on semiconductor chip exports to China.

In China, the Shanghai Composite is higher by 0.45% to 3 048.

The Dow Jones Industrial Average fell by 0.3% to 30 333, while the S&P 500 was lower by 0.8% to 3 665.

Snap shares fell 26% after missing third quarter revenue expectations and offering weak revenue guidance for the fourth quarter,

AT&T Inc. reported a 26% jump in third-quarter profit, as more Americans opted for its wireless services and upgraded to 5G plans. Total revenue rose 3% to $30 billion, exceeding expectations of $29.86 billion.

 

Commodities:

Gold is down 0.64% to $1 621/oz, while Platinum is higher by 3.11% to $909.40/oz.

Brent crude was 0.23% firmer at $109 a barrel.

 

Currencies:

The rand traded at R18.35 against the US Dollar, R20.53 against British Pound and R17.93 against the Euro.

The Euro is slightly weaker against the US Dollar to trade at $0.9765.