Daily Report 25 January 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.1% lower at the 80 037 level.

In a trading update from ArcelorMittal Limited for the six months ended 31 December 2022. The company said that they expect earnings per share to decline from R5.94 profit per share for the comparative period to a profit within a range of R2.20 and R2.50 per share for the period (representing a decrease of between 58% and 63%). Headline earnings per share to decline from R6.15 headline profit per share for the comparative period to a headline profit per share within a range of R2.15 and R2.45 per share for the period (representing a decrease of between 60% and 65%).

Clicks Group Limited said in a trading update for 20 weeks to 15 January 2023 that the group’s retail sales (which includes Clicks and the franchise brands of The Body Shop and GNC) excluding Covid-19 vaccinations increased by 12.2%. Sales in comparable stores +8.9% y/y. Group turnover for the period increased by 7.8% to R15.6 billion. The group’s interim results for the six months to 28 February 2023 are expected to be released on SENS on or about 20 April 2023.

Astral Foods LTD. has cautioned the market that the company’s poultry division has experienced severe operational disruptions through 1Q2023 due to severe load shedding conditions as well as record high feed input costs that will impact operational efficiencies and costs negatively. Astral said that earnings per share (EPS) and headline earnings per share (HEPS) for the six months ending 31 March 2023, are expected to decrease by 90%.

 

SA Economy:

The composite leading business cycle indicator in South Africa increased by 0.1% from a month earlier in November 2022, rebounding from a 0.9% decline in October. The largest positive contributors were an acceleration in the six-months growth rate in new passenger vehicle sales and a rise in the volume of orders in manufacturing.

President Cyril Ramaphosa will meet with US Treasury secretary, Janet Yellen today to discuss bilateral ties and address global and regional areas of concern.

 

Global Economy:

The S&P Global Eurozone Composite PMI rose to 50.2 in January 2023, up from 49.3 in the previous month and above market consensus of 49.8.

The S&P Global Germany Services PMI rose to 50.4 in January 2023, up from the previous month’s 49.2 and beating market expectations of 49.6.

The U.K. economy contracted in January at its sharpest pace in two years, after data from a purchasing managers survey showed. The S&P Global/CIPS U.K. composite purchasing managers’ index fell to a 24-month low of 47.8 in January from 49.0 in December.

The Central Bank of Nigeria raised its interest rate by 100 bps to 17.5%.

 

Global Company:

The FTSE 100 closed 0.35% lower at 7 757, led by losses in pharmaceuticals and oil and gas shares.

AstraZeneca and GSK fell by 2.2% and 0.8%, respectively. Also, BP and Shell retreated as crude prices steadied for the second day in a row.

The Hang Seng Index – closed.

In China, the Shanghai Composite – closed.

The Dow Jones Industrial Average closed 0.31% higher to 33 733, while the S&P 500 closed flat at 4 016.

3M fell over 6.2% after reporting a drop in profit, while General Electric gained 1.1% after the company reported quarterly results that topped analysts’ expectations.

 

Commodities:

Gold is up 0.35% to $1 933/oz, while Platinum is higher by 1.04% to $1 057/oz.

Brent crude was 2.39% lower at $86.13 a barrel.

 

Currencies:

The rand traded at R17.17 against the US Dollar, R21.18 against British Pound and R18.73 against the Euro.

The Euro is firmer against the US Dollar to trade at $1.0907.