Daily Report 8 March 2022

SA Company News:

The JSE All Share Index closed 1.92% lower at 73 295, as the US confirmed a ban on Russian crude oil imports, thereby pushing the price of oil to its highest level since 2008. The JSE continues to outperform global markets, due to higher commodity prices such as Platinum and Palladium. Prosus said it will write off its entire 25.9% stake in Moscow-headquartered online platform, VK Group, which is valued around $700 million on its books. VK Group Ltd was previous known as Mail.Ru and it is one of Russia’s largest internet companies, known for the VKontakte social network, Russia’s answer to Facebook. Prosus is part of a cross-holding entity with Naspers, with the two companies sharing a single board. Prosus shares are down 33% this year while Naspers shares is down 34% year to date. AVI reported that it increased its revenue by 2.3% to almost R7.3 billion for the six months to end-December and that headline earnings grew 6.8%. The company declared an interim dividend of 170 cents per share, which is 6% higher than last year.

SA Economy:

Eskom implemented stage 2 load shedding yesterday after its Unit 3 broke down at the Medupi power station and is expected to continue until Saturday. Eskom said load shedding is required for them to replenish the emergency generation reserves, which have been utilised over the past weekend.

​Global Economy:

President Joe Biden’s is willing to move ahead with a U.S. ban on Russian oil imports even if European allies do not. Russia warned that prices could surge to $300 a barrel and it might close the main gas pipeline to Germany if the West halts oil imports over the invasion of Ukraine. Talks between Ukrainian and Russian officials have made limited progress so far on negotiating a cease-fire, but the discussions are expected to continue today. Russian President Vladimir Putin said Kyiv must agree to his demands. 

Global Company:

With inflation at a 40-year high and the Federal Reserve signaling a series of interest rate hikes on the horizon, investors started the year by fleeing growth stocks. High-growth tech stocks came under pressure before Russian’s invasion of the Ukraine. The Dow Jones and the S&P 500 closed sharply lower, following four straight weeks of declines as investors try to assess stagflation risks to the global economy.  The equity selloff drove Asian markets lower this morning, with China’s Shanghai Composite falling 2.17% and Japan’s Nikkei closing down by 2.94%.

Crypto Currencies:

Crypto markets came under heavy selling pressure, with Bitcoin, the world’s most-traded digital coin, tumbling below $38 000 while other crypto currencies, including Ethereum, also saw their values fall sharply. Investors opted for the relative shelter in precious metals and bonds from the waning risk-on sentiment after the Russian invasion of Ukraine. Major crypto exchanges, including Coinbase, are also facing increasing pressure from regulators to block the addresses of Russian users.

Commodities:

Gold is up 0.71% to $1 996/oz, while Platinum is 0.61% lower at $1 140/oz. Brent crude was 1.32% lower at $127 a barrel.

Currencies:

The rand traded at R15.40 against the US Dollar, R20.16 against British Pound and R16.69 against the Euro. The Euro remained under pressure against the dollar, currently trading at $1.09.