Daily Report 31 January 2023

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.6% lower at the 80 325 level, as investors turned their focus to monetary policy decisions by the US Federal Reserve, Bank of England and the European central bank.

In trading update from Pepkor Holdings for the 3 months ended 31 December 2022, the company said that retail sales were up 8.2% to R22.42 billion. Pepkor also opened 112 new stores on a net basis, thereby expanding their retail store base to 5 942 stores.

In trading update from Capital & Counties Properties (Capco), the company reported that its prime assets in London’s West End continue to experience high demand from retailers especially at Covent Garden. The group said that it had signed 71 new leases and renewals in 2022, representing £10m of contracted income signed and is about 13% higher than the estimated rental value (ERV) at the end of December 2021.

In a trading update from Shoprite, the company said that total group sales from continuing operations was up16.8% y/y to approximately R106.3 billion. The group’s furniture segment, made up of OK Furniture, OK Power Express and House & Home, reported an increase in sales of 8.6%. This segment contributes about 3.7% to group sales.

Pan African Resources (PanAf) has reported a drop in production for its half-year to end-December, weighed down by issues at Barberton, load shedding, and rising costs. PanAf said that gold production fell 14.6% to 92 307 ounces, but the company has kept its full-year guidance unchanged between 195 000oz to 205 000oz.

Vodacom Group Ltd. reported a 15% rise in third-quarter revenue as it benefited from the acquisition of Vodafone Egypt and depreciation of the rand against a basket of international currencies. The company generated revenue for the quarter ended 31 December 2022 of 30.71 billion rand ($1.77 billion), compared with R26.75 billion.

 

SA Economy:

The government said that they are considering mechanisms to address the rising cost of electricity and the ongoing energy crisis. These could include measures such as helping households and small businesses to install solar power and energy-saving devices. Details to be announced in the coming weeks.

South Africa recorded a budget surplus of 44.97 billion rand ($2.60 billion) in December, compared to a surplus of 41.89 billion rand in November.

 

Global Economy:

The German economy unexpectedly shrank in the fourth quarter of 2022. Gross domestic product decreased 0.2% quarter on quarter. The contraction was mainly led by a decline in household consumption.

The International Monetary Fund (IMF) raised its 2023 global growth outlook to 2.9% from their October forecast of 2.7%.

China’s manufacturing and services sectors unexpectedly returned to growth in January. The official NBS Manufacturing PMI increased to 50.1 in January 2023 from 47.0 in the previous month. Similarly, the official NBS Non-Manufacturing PMI, which comprise of the services, catering and construction sector, increased to 54.4 in January 2023 from 41.6.

 

Global Company:

The FTSE 100 closed 0.25% higher at 7 784, with J Sainsbury and Auto Trader Group being the top gainers, up 4.1% and 2.8%, respectively.

The Hang Seng Index is lower by 1.48% to 21 744.

In China, the Shanghai Composite is down 0.64% to 3 256, consumer-related and technology shares led the decline.

Electric Vehicle maker, BYD rose 3.84% after the company said that they expect their net profit for 2022 to increase from 1.25 billion yuan ($185.5 million) to up to 16.3 billion yuan.

Samsung Electronics reported a 70% y/y drop in Q4 operating profit, the company said that the business environment deteriorated due to sluggish demand amid a global slowdown.

The Dow Jones Industrial Average closed 0.77% lower to 33 717, while the S&P 500 was down 1.3% to 4 017.

Microsoft and Tesla fell 2.2% and 6.3% respectively. Ford was also down more than 1% after the company announced price cuts for its products.

 

Commodities:

Gold is down 0.3% to $1 922/oz, while Platinum is higher by 0.4% to $1 011/oz.

Brent crude was 2.07% lower at $84.90 a barrel.

 

Currencies:

The rand traded at R17.42 against the US Dollar, R21.50 against British Pound and R18.89 against the Euro.

The Euro is slightly weaker against the US Dollar to trade at $1.0842.