Daily Report 08 December

SA Company News:

The JSE All Share Index closed at a new all-time high of 72 939 yesterday, despite SA’s worse-than-expected GDP numbers.  Implats has bought an additional 0.33% stake in Royal Bafokeng Platinum, bringing its stake to 32.26% while Northam Platinum has also bought a further stake bringing their total shareholding in RB Plats to 34.95%. Old Mutual plans to launch a new fund in 2022 focusing on artificial intelligence. This fund will have global exposure to blockchain, cyber security, hydrogen, longevity, the metaverse, quantum computing, robotics, smart cities, the internet of things, and space exploration, including asteroid mining. African Rainbow Capital Investments has announced that the Chinese tech company, Tencent, will own up to 8% of TymeBank after the completion of a $180m capital-raising. TymeBank uses a hybrid model of digital banking and has 4.2 million customers in SA.

SA Economy:

South Africa’s GDP contracted 1.5% in the third quarter to September 2021, following a downwardly revised 1.1% expansion in the previous period compared with market expectations of a 1.2% decline.  The largest contributor to the decline was agriculture, posting a 13.6% decline in activity. Construction, mining, transport and communications, manufacturing and trade also posted contractions. South Africa’s economic growth forecast of 5.1% for 2021 is at risk after more than 90 nations imposed travel bans on the country right before its summer holiday season due to of the discovery of the coronavirus omicron variant. 

​Global Economy:

The Eurozone economy grew strongly in the third quarter. The Eurozone’s gross domestic product expanded by 2.2% from July to September compared with the prior three-month period. The US trade deficit narrowed to $67.1 billion in October 2021 from a record high $81.4 billion gap in September and in line with market forecasts of $66.8 billion. It is the lowest trade deficit in 6 months. The Reserve Bank of India held its benchmark repo rate at 4%, saying it was maintaining an accommodative monetary policy stance as long as necessary to support economic growth and keep inflation within the target.  Japan, the world’s third-largest economy, after the U.S. and China, contracted 3.6% on an annualised basis.

Global Company News:

The FTSE 100 rose by 1.1% to a three-week high of 7 317 points alongside other major European bourses as some of the Omicron jitters began to fade. The Dow Jones Industrial Average rose 1.4% to 35 719 and the S&P 500 added 2.07% to 4 686. Intel rose 3.1% following news that it’s planning to list its self-driving car unit, Mobileye in mid-2022. Apple shares rose 3.5% after Morgan Stanley maintained its overweight rating on the share and raised its price target to $200.

Commodities:

The Gold price rose slightly to $1790 with traders shifting their attention to US inflation data due later this week. Platinum gained 1.45% to $949/oz. Brent crude was 2.3% firmer at $75.31 a barrel.

Currencies:

The rand traded at R15.86 against the US Dollar, R21.01 against British Pound and R17.88 against the Euro. The Euro slightly higher at $1.128.