Daily Report 03 December

SA Company News:

The JSE All Share Index closed slightly lower at the 71 020 as the Omicron variant continued to spread. Old Mutual has proposed R5.80 per share for the company Long4Life, valuing the SA investment company founded by entrepreneur Brian Joffe at about R3.7bn. The group’s portfolio includes Sportsmans Warehouse, Outdoor Warehouse, as well as Inhle Beverages and Chill Beverages. Impala Platinum (Implats) said it has built up its stake in Royal Bafokeng Platinum (RBPlats) to almost a third after their buyout bid offered to investor’s earlier this week JSE and London listed Tharisa reported that its profit more than doubled in the year ended 30 September, driven by strong production and improved prices of platinum group metals and chrome concentrates. Revenue increased 46.9% to $596.3m and headline earnings 129.6% to $103.1m. Tharisa has paid out a record dividend of $24.2m (R388m) to shareholders for 2021.

SA Economy:

The Bureau for Economic Research (BER) released the retail confidence index for the fourth quarter of 2021 dipped slightly from 56 to 52. Business conditions for retailers improved as a result of less stringent lockdown restrictions and increased foot traffic to malls and shopping centres. The World Health Organisation (WHO) is deploying a team to Gauteng, the epicentre of the Omicron outbreak, to help with surveillance and contact tracing. There had been a rapid increase in cases in the province, with a 20% rise in the seven-day rolling average of daily cases, the percentage of positive tests now above 10% and an increase in admissions – all driven by Omicron. Ford Motor company announced that it had invested R600m in its Gqeberha engine plant in the Eastern Cape to make V6 turbodiesel engines for its new Ranger pickup. The investment is an indication of confidence in SA by multinational companies like Mercedes-Benz, Toyota and Nissan. They have all completed multibillion rand investments this year.

​Global Economy:

The Euro Area unemployment rate edged down to 7.3% in October 2021, the lowest level since April 2020 and in line with market expectations. Amongst the largest Euro Area economies, the highest jobless rates were recorded in Spain (14.5%), Italy (9.4%) and France (7.6%), while the lowest rates were recorded in the Netherlands (2.9%) and Germany (3.3%). The United States will delay its deal to remove tariffs on UK steel and aluminum because of concerns about post-Brexit trade rules affecting Northern Ireland according to reports. Former U.S. President Donald Trump imposed 25% and 10% tariffs on steel and aluminum imports on the European Union in 2018. The tariffs were withdrawn in October of this year, but they remain in place for Britain due to its exit from the EU. Investors is awaiting the release of US non-farm payroll data later today, which will provide the latest snapshot of the state of the world’s top economy.

Global Company News:

European stocks were deep in the red yesterday, following a see-saw day on Wall Street. Apple told its parts suppliers that some orders may not materialize because demand for the iPhone 13 has slowed. The company had cut production of iPhone 13 by 10 million units, down from a target of 90 million, due to a global chip shortage. Nigeria’s telecoms regulator has picked MTN Nigeria, Airtel Africa and Mafab Communications to bid for 5G licenses for an auction set for 13 December. The Chinese group, Didi Global plans to delist from the New York stock exchange and pursue a listing in Hong Kong, renewing concern about U.S.-China tensions and tech regulation.

Commodities:

US gold futures dropped 0.8% to $1 770 on Chair Jerome Powell’s latest comments. Powell said the Fed needs to be ready to respond to the possibility that inflation might not recede in the second half of 2022, and that it would consider a faster tapering of its bond purchases at its meeting due to start on December 14. Platinum gained 0.7% to $939/oz. Brent crude was 2.21% firmer at $70.45 a barrel.

Currencies:

The rand traded at R15.94 against the US Dollar, R21.21 against British Pound and R18.02 against the Euro. The Euro has recovered slightly to trade at $1.135.